ETZ 4(WR) ` IN THE EMPLOYMENT TRIBUNAL (SCOTLAND) AT EDINBURGH Judgment of the Employment Tribunal in Case No: 4107832/2020 Heard at Edinburgh on the Cloud Based Video Platform, on th and th June 2021 Employment Judge J G d’Inverno Tribunal Member Ms Mary Watt Tribunal Member Ms J Copeland Miss J Dowling v KPMG Holding LLP — 2021

Miss J Dowling brought an equal pay claim against KPMG UK Limited under sections 64 to 71 of the Equality Act 2010, relying on Michael Leonard as her male comparator. The respondent admitted that the claimant and Mr Leonard did equal work for section 65 purposes and that the claimant's pay term was less favourable within section 66. At the hearing the claimant's annual pay was found to be £32,500 and Mr Leonard's annualised pay was £37,740.

The tribunal found that the pay difference arose when Mr Leonard was externally recruited in October 2017 at an annualised salary of £36,000. It accepted that the respondent matched his pre-existing salary to secure his recruitment, and that the relevant factors included his status as an external hire, significant assistant manager level experience, broader commercial and corporate tax experience, and his pre-existing Chartered Tax Advisor qualification. The tribunal found that a female candidate in materially the same recruitment circumstances would also have been offered £36,000.

The tribunal found that the claimant had been promoted to Grade D in 2017 at the bottom of the salary range, had received a £500 increase in 2018 when rated PZ4, a £1,000 increase in 2019 when progressed to D3, and no increase in 2020 because of the respondent's firm-wide position on merit awards during the Covid pandemic. Mr Leonard progressed to D3 in 2018, had consistently been rated PZ3, and received later increases of £1,000 and £740 before also receiving no increase in 2020. The tribunal found that the original recruitment-related explanation had a continuing effect in the context of the respondent's salary structure and was not time-limited.

Applying the section 69 material factor defence, and referring to Bowling and Walker, the tribunal held that the relevant question was whether the continuing pay differential was explained by factors not tainted by sex, rather than whether the respondent could have acted to remove the differential. It found that the respondent's material factors were genuine, causative, significant and unrelated to the sex of either the claimant or Mr Leonard. It also found that differences between salaries of female Grade D3 employees were attributable to factors other than sex, and that the highest paid Grade D3 employee in the group was female.

The tribunal found that the claimant had not shown, under section 69(2), that reliance on the material factors put her and other women doing equal work at a particular disadvantage when compared with men doing equal work. It further held that, if justification had been required, the respondent's aim of recruiting and retaining competent, experienced and professional staff to service its client base was a legitimate aim and that external recruitment, salary matching or payment of a recruitment premium was a proportionate means of achieving it.