Asda a step closer to equal pay ruling

The Employment Tribunal in Brierley and others v Asda Stores Ltd has ruled that the majority of claimants working in retail roles in Asda supermarkets were doing work of equal value to their counterparts working in distribution centres.

So, what does this mean and what happens next?

The Law

The Equality Act 2010 requires men and women to receive equal pay for equal work.

The law will achieve this by implying a ‘sex equality clause’ into the employee’s contract replacing any less favourable term with the more favourable one.

Claims for equal pay involve three key stages.

Firstly, the employee must be able to identify an appropriate comparator.  This comparator must be an actual comparator (as opposed to a hypothetical one) of the opposite sex, a current or previous employee and must work (or have worked) at either the same establishment, a different establishment but with common terms, or employed by a single body responsible for setting or continuing their terms of employment.

Secondly, the employee must show that the work they are undertaking is ‘equal work’.  This means it is:

• ‘Like work’ which is essentially work that is the same or broadly similar;
• ‘Work rated as equivalent’ which involves the carrying out of a job evaluation study/scheme; or
• ‘Work of equal value’ which means it does not fall into the above two categories but is nonetheless equal in terms of the demands made on the employee and comparator by reference to factors such as effort, skill and decision making.

Finally, the employer will need to show that the difference in pay is due to a material factor which is not directly or indirectly discriminatory on the grounds of sex to successfully defend the claims.

Asda Claims

• The equal pay claims against Asda have been brought by staff working on the shop floor (such as check out operators and shop floor assistants) who are predominantly female. They have been paid lower hourly pay than staff working in distribution centres who are predominantly male.

These claims commenced in 2014 and so have already been ongoing for some time.

The claimants successfully argued that their roles could be compared with warehouse roles for equal pay purposes (a decision that Asda appealed all the way to the Supreme Court).  The Supreme Court, upholding the decisions of the lower courts, found that common terms of employment applied between the two groups.

In this most recent decision, the Employment Tribunal had to consider the second test, whether the work was of ‘equal value’.  The Employment Tribunal compared 14 of the retail roles with 17 roles in the distribution centres.  It found that 12 of these roles constituted work of ‘equal value’.

Two of the roles, personal shoppers and shop-floor assistants for edible groceries, were not considered to be work of ‘equal value’ so these claims, at this stage, will not progress, though this is subject to any appeal. These two roles are understood to make up around 11,000 of the 60,000 claimants.

There is also a risk that Asda will appeal the decision regarding the other roles.  However, assuming the decision remains the same, the case progresses to the final stage where the Employment Tribunal will consider whether the pay differential was due to a material factor which was not directly or indirectly discriminatory on the grounds of sex.

Conclusion

This is clearly a significant case for equal pay in the retail sector and for Asda who, it is reported, could potentially face an award of £1.2 billion in back pay.  It’s certainly a case that other supermarkets and retail companies will be watching nervously.

Only 6 months ago did Next lose a significant equal pay claim, setting them back around £30 million.  Next were unable to demonstrate that the pay disparity between their store workers (predominantly women) and their warehouse workers (predominantly men) was not based on sex.  Next had sought to argue that market forces were the behind the differences in pay but were not successful.

Similarly, Morrisons is facing equal pay claims in respect of their shop workers and distribution centre staff with claimants in that case also making significant advancements.

All eyes will now be on this final stage and we will keep you updated as this case develops.