Tribunal finds against Commerzbank for sex & maternity discrimination

Compliance staff at Commerzbank engaged in gender stereotyping, assuming “toxic” relations in the office must be the fault of “divisive” women, a tribunal has ruled. Martin Stevens analyses the judgment.

Martin Stevens is a former City compliance officer.

A recently-published employment tribunal judgment [1] ruled that senior compliance staff at the London branch of the German bank Commerzbank AG discriminated against Jagruti Rajput on the grounds of her sex and maternity status as well as subjecting her to harassment. As a result of her treatment by the bank, she was awarded £185,000.Rajput joined Commerzbank’s compliance department in November 2012 as a vice president in the United Kingdom markets compliance team. She was an asset to the team. Her appraisal for the period ending December 2013 was largely positive. In October 2014, the head of UK markets compliance completed a talent ratings form for Rajput that indicated she would be a candidate in the future for his role, should the opportunity rise.In March 2015 Rajput rejected her 2014 appraisal, believing that it had not been conducted in an open, transparent manner and disagreeing with the final ratings. The following month, the head of the markets compliance team announced his departure from the bank. The tribunal heard evidence of a high staff turnover within the team, that the head was a “micromanager”, that he was a bully and treated staff aggressively. Evidence also showed that the atmosphere within the team was “toxic”.In June 2015 the head of markets compliance role was internally advertised. The bank’s recruitment policy was to encourage internal progression. Rajput applied for the position as did other vice presidents in the team. Although external candidates were interviewed, the role was not filled, but Kevin Whittern was deemed to be the team’s ‘point person’. The recruitment process was run by Stephan Niermann, head of regional compliance for the UK and Asia. He justified his decision not to appoint Rajput to the role as she had a “divisive personality”. In the tribunal hearing, Niermann explained this comment by saying that Rajput came into his office to advance her position, she was intrusive and she wanted things done immediately.PregnancyThe search for a new head continued for many months. On 13 November 2015, Rajput announced that she was pregnant. By the end of November, Whittern was formally appointed as deputy head of the team. Soon after, Rajput complained to Niermann about his decision.On 4 March 2016, Rajput’s waters broke at work. After attending hospital, she returned to the office for a short time to finish some work before starting maternity leave. She gave birth on 7 March.Prior to her maternity leave, Rajput discussed the allocation of her workload with a colleague, Julia Burch. Burch complained to Jon Dyos, the newly-appointed head of markets compliance, and an existing friend that Rajput had returned to work after attending hospital following the breaking of her waters. In his tribunal statement, Dyos stated this incident was evidence that Rajput was “controlling”.On 14 March, Rajput asked to participate in a team meeting via telephone, believing it to be an opportunity to update the team on the birth and to clarify handover issues. Initially there were telephony issues preventing her joining the meeting. Once they were resolved, Whittern and Burch indicated that Rajput should not join the meeting, that they were not interested in news of the birth and that the meeting had finished.By 11 April, the bank hired Sheralee Bailey to provide maternity cover for Rajput’s absence. It was not a conventional maternity placement. Burch took over Rajput’s role, with Bailey assisting Burch.In a desire for a flatter management structure, on 12 April Niermann discussed with Dyos that Rajput would no longer be Burch’s line manager. This structure was implemented on Rajput’s return to work. Nevertheless, in a 29 April meeting, Dyos confirmed to Rajput that she would continue to be Burch’s line manager.Dyos strongly discouraged Rajput from attending a team meeting on 20 May on the grounds that Burch was attending anyway. The tribunal acknowledged that Dyos was motivated to help Rajput by not putting any pressure on her to attend, because as a father he knew what the “early days of a newborn baby involves”.On 2 June, Rajput met Niermann to discuss returning to work and to review her application for the head of team role. Niermann stated he wanted someone “to hit the ground running”. He omitted that he wanted someone with more management experience than her. Therefore, he appointed Dyos.On 19 August, Rajput met Dyos to discuss the handover of work on her return and to receive an update of outstanding work. Dyos said that Burch had overseen all matters and that a handover was unnecessary. The tribunal concluded that Burch was unwilling to return to a junior role with Rajput as her manager.Return to workRajput returned to work on 7 September. In November 2016, her talent development form noted that she was 2-3 years away from being ready for the head of markets compliance role. The tribunal found it “notable” that the previous form recorded her as being two years away from promotion. Dyos told the tribunal he felt Whittern was only a year away from promotion as he had a better personality, was easier to get along with and was a better communicator than Rajput. The tribunal interpreted Dyos’s view as implying Rajput was difficult to get on with and that she was a poor communicator and observed, “This is not supported by the evidence.”In October, Rajput asked Dyos to show in an organisation chart that Burch reported to her. He did this after being reminded. Shortly afterwards, Rajput complained to Dyos about not being invited to a new products committee meeting. Dyos apologised, blaming an oversight.On 16 November Rajput met with Dyos. She said her role and status had been eroded since her maternity leave. She mentioned her previous role as deputy head, but Dyos stated that “some people were a little sensitive about this”. In another meeting shortly afterwards, the tribunal found that Dyos acknowledged he had expected some difficulties on her return as Burch was “running it on her own” during Rajput’s absence. Nevertheless, in her appraisal for 2016 Rajput received a rating of 111 per cent.Again, on 20 February 2017, Rajput discussed with Dyos her feeling of marginalisation. He apologised and said that any disparity in the work allocation was “simply accidental”. On 3 May, Rajput mentioned she was feeling unwell. Whittern said, in effect, “What have you been up to? Maybe a sibling for Sia?” A few weeks later, Rajput complained in an email to Dyos about the diminution in her role. However, on 2 June, she was notified that she was recorded in the bank’s systems as the deputy head of the team. On learning this, Dyos queried when he had agreed to this role for Rajput.On 5 June, Rajput was notified of the result of the grievance she had filed in March 2017. Although it was found that management had not dealt with issues well, no discrimination had occurred. Shortly afterwards Rajput’s solicitor challenged the grievance outcome and suggested that Rajput be given the newly-created role head of Eastern and Western Europe compliance. The bank said that Rajput was entitled to apply for the role.On 23 June, Rajput expressed her interest in the role to Anthony Lowther, the UK regional head of compliance, who sought to dissuade her from applying. Towards the end of July 2017, the new role was internally advertised for seven days, the minimum period under the bank’s policy. The tribunal noted that roles were usually internally advertised for 21 days. Rajput did not see the advertisement. Another female staff member indicated to Lowther her interest in the role. Again, he sought to dissuade her. The staff member was led to believe that the role had been filled prior to the round of interviews. Rajput lodged another grievance about the new role, however it was rejected.The tribunal’s analysis and conclusionsThe tribunal recognised there were a number of separate aspects to the case: the appointment of a male colleague to the role of point person or deputy head; the appointment process for a new head of markets compliance; Rajput’s treatment during maternity leave; her role on return to work; the recruitment process for the head of Eastern and Western compliance role; as well as the grievance process.The bank acknowledged that women are significantly under-represented at senior levels in the industry. At Commerzbank, there was a lack of women at L3, the level of the head of markets compliance role. Indeed, no woman had been promoted to any compliance L3 role since 2012.The bank ignored good recruitment practice as there were no written records to support the appointment of the point person/deputy head role. Nor were any records available of the interviews held for the head of markets compliance role. The tribunal noted that the absence of such records facilitates discrimination – as without transparent recruitment procedures and records, discrimination, whether deliberate or not, becomes more likely.The tribunal observed that discrimination can occur through stereotypical attitudes. Traits in males that may be seen as positive might be seen as negative in females. Men are praised for hard work and determination, while, in this case, Niermann believed Rajput had an “unhealthy obsession with work”. Men are praised for having ambition, whereas Niermann said Rajput was “divisive”, “intrusive” and trying to “further her own interests”. Niermann accepted that “forceful” may be a more accurate description of Rajput. The tribunal noted that men are often lauded for being forceful, whereas it opined that Niermann found it to be a negative trait in Rajput. Men are frequently praised for their commitment to work, whereas many of the bank’s witnesses described Rajput’s attitude pejoratively when returning to work after her waters broke, noting she “had to be forced out of the office”. Dyos felt this incident showed Rajput was “controlling”.Opaque recruitment procedures facilitate the selection of candidates similar to the recruiter. Whittern was chosen as the point person/deputy head of the team due to his “personality”, being “easy to get along with” and for being a “good communicator”. The tribunal noted there was no evidence to suggest Rajput was a poor communicator and, to the extent the point person was assigned without transparency resulted in tension within the team, this lack of transparency was deemed to be of “no real significance” by the bank.The tribunal observed that frequently women are assumed to be emotionally involved in office politics. They found that Niermann made this assumption, describing Rajput as “divisive”. He could not explain why he used this term. Throughout the case, the term was only used in relation to women, but never men. Also, it noted there was an assumption that the “toxic” relations within the team were due to the “divisive” women.Niermann was found to have formed, very quickly, a negative view of Rajput. He saw her complaint about being micromanaged as being “tendentious”. The tribunal found it difficult to understand why her complaint was instantly dismissed. Again, they noted that Niermann concluded that the “divisive” women were responsible for the poor relationships within the team, without considering the possibility that the male head was responsible. Accordingly, Niermann felt Rajput was unsuitable for the head role when it arose.The tribunal found that Niermann was “disingenuous” when he suggested that appointing Whittern as the team’s point person was “insignificant”. He always wanted to appoint Whittern as the point person and treated him accordingly. This occurred because of a stereotypical view that Rajput was “divisive” because she was female. “Gender was a significant and material factor in the decision taken by Mr Niermann,” observes the tribunal. It concluded that the appointment of Whittern to the deputy head role was an act of direct sex discrimination in favour of Whittern.The tribunal noted Niermann’s repeated denials to Rajput that Whittern had been promoted and, accordingly, found she was treated differently due to her gender – as Niermann “did not tell” her the truth about the situation because she was “divisive”. This treatment represented harassment according to the tribunal.The tribunal found that Niermann directly discriminated against Rajput on the grounds of her gender when he decided that she was not suitable for the head role as he believed she was “divisive” based on his stereotypical view of women. Conversely, it found that Niermann did not see such a trait in men to be negative.In dissuading Rajput from attending the quarterly review meeting, the bank made assumptions about what a woman should do while on maternity leave. The tribunal found that the bank directly discriminated against Rajput on the grounds of her maternity status.It also deemed that substantial elements of Rajput’s role had been transferred to Burch when she went on maternity leave. When hired, Bailey assisted Burch rather than taking on Rajput’s duties, as Burch had essentially taken on Rajput’s job. On her return from maternity leave, there was no handover of work back to Rajput as Burch “had no real intention” of relinquishing the role. Also, the tribunal determined that on her return to work Rajput’s role was diminished and she was sidelined as Burch’s line manager. The tribunal considered that such discrimination was continuing and constituted ongoing maternity discrimination.The tribunal did not uphold Rajput’s discrimination claims regarding failing to be automatically appointed to the head of Eastern and Western Europe compliance role, the failure by Niermann to provide feedback on the head of markets compliance role, her treatment during maternity leave and the resolution of her grievances.As a result of its findings in her favour, the tribunal awarded Rajput £185,000. The bank is reported to be appealing against the tribunal’s judgment.CommentThe Commerzbank careers website [2] states, “Diversity is at the centre of our organisational culture and we believe that having a diverse and inclusive culture is integral to the success of Commerzbank... Each individual should be able to express themselves in a safe, positive and nurturing environment.” Similar sentiments are repeated in the bank’s 2018 Annual Report. It would appear that Niermann, Dyos and Burch were not aware of the bank’s view on diversity or they chose to ignore it.One may further question the bank’s commitment to their stated values as they elected to take this matter to an employment tribunal and employed a Queen’s Counsel barrister to plead their case, rather than settling the matter without the need for a hearing. Consequently, the bank put Rajput under further strain and pressure.Given that the head of compliance, Niermann, and other senior compliance staff were found to have breached equality and discrimination laws, questions may be raised about the compliance culture within the branch. If senior compliance staff did not comply with their continuing legal obligations, their credibility in the eyes of the rest of the approximately thousand bank staff in London may be severely diminished. Some staff may ponder how compliance staff can enforce compliance with regulatory matters if they breach fundamental aspects of employment law, namely the non-discriminatory treatment of women, particularly mothers.It would appear that the tribunal’s stringent criticism of Niermann has not impeded his career. According to his online profile, he left Commerzbank a few months after the judgment was delivered to become head of compliance at JP Morgan in Frankfurt. Also, Dyos and Burch have left the bank according to their internet profiles. It is not known whether these three departures are linked to this case.The Financial Conduct Authority has recently taken an interest in non-financial misconduct. It believes that how firms approach diversity and equality issues may be reflective of the firm’s culture as a whole – “non-financial misconduct is misconduct, plain and simple”. [3] The bank’s 2018 Annual Report informs its readers that, in July 2017, the London branch was subject to a FSMA section 166 investigation whereby a ‘skilled person’ was appointed to review the branch’s anti-money laundering and counter-terrorist controls. A “full remediation” is taking place, which is “going well” we are informed. With the findings of the employment tribunal and the review of the ‘skilled person’, it appears there may be some issues with the culture of compliance within the London branch. Whether the FCA launches an investigation into the bank’s culture in London just as it has reportedly done at the Royal Bank of Canada’s unit in the capital remains to be seen.Notes[1] https://assets.publishing.service.gov.uk/media/5bb5fa3fed915d0782506d64/Ms_J_Rajput_v_Commerzbank_AG_-_2207126-2017_-_Judgment.pdf.[2] www.commerzbank.com/en/hauptnavigation/karriere/arbeiten_bei_der_commerzbank/diversity___/diversity.html.[3] www.fca.org.uk/news/speeches/opening-and-speaking-out-diversity-financial-services-and-challenge-to-be-met.