Asda equal pay claims: What are the implications for similar employers?

Mark Newcombe/Rex/Shutterstock
Mark Newcombe/Rex/Shutterstock

As the latest stage of the UK’s largest ever private sector equal pay claim, against supermarket giant Asda, begins tomorrow, what implications might this have for other employers? Andrew Gibson and Emma Ahmed from Hill Dickinson consider the issues.

The UK’s third largest supermarket chain, Asda, recently suffered another major blow in its defence of around 7,000 equal pay claims brought by its female store workers.

They argue that their work should attract the higher rate of pay paid to the retailer’s mainly male distribution workers. Asda appealed against a preliminary ruling that its female store workers can compare themselves to male staff working in its distribution centres (on the basis that their work is of “equal value” for equal pay purposes).

The EAT has now rejected that appeal and a mass claim will be allowed to go ahead, in a ruling that has potential ramifications for other employers, particularly retailers, operating similar pay models.

Tomorrow sees the start of a stage one equal value hearing at an employment tribunal in Manchester, which decides the process for writing and agreeing job descriptions for the women and men’s jobs.

Asda initially tried to argue that complex equal pay claims should be heard in the High Court (which would bring with it daunting cost consequences for the claimants). This argument was resoundingly rejected by the Court of Appeal in 2016.

Pay bargaining

In this latest decision, the EAT had to consider if the employment tribunal had been wrong to hold that the female store workers could compare their work for equal pay purposes with that of the mainly male workers based at Asda’s distribution depots.

Asda’s major grounds for arguing to the contrary centred around complex arguments of European law on “single source” for decisions about pay and conditions.

The comparator group were employed in distribution centres, where pay decisions were based on collective bargaining with the trade union. The Claimants, on the other hand, worked in stores with a completely different approach to pay bargaining, without trade union involvement, therefore a comparison ought not to be made between the two.

The EAT held that the Tribunal had been entitled to hold there was a “single source”, in the sense that in both groups of workers the ultimate decision on pay fell to the board of Asda.

Even though comparators would never be employed in the stores with the claimant group, the key question is whether, if the comparators were transferred to do their present jobs in a different location, they would remain on terms broadly similar to their existing terms.

Could this happen elsewhere?

The EAT’s decision has huge potential implications for retailers with their own distribution centres.

Sainsbury’s is already facing similar equal pay claims and other retailers will be fearful of finding themselves targeted.

Indeed, outside the retail sector, the ruling will be concerning for any employer with staff on very different pay structures in different sections of the business.

We assume that everyone now understands that a woman must be paid equally to a man doing like work, but many employers outside the public sector are less familiar with the concept that equal pay must also be paid for different work if it is of “equal value”.

Now may be a good time for employers concerned about this decision to audit their pay structures and consider undergoing a job evaluation process.

End of the road?

Although the EAT’s decision is undoubtedly disappointing for Asda, it is not the end of the road.

Pending any further appeal, the equal pay claims will now proceed and Asda is very likely to continue to strenuously defend the substance of the claims and argue that the work of the store workers is not of equal value to that of the distribution workers, and that even if they are, there are non-discriminatory reasons which justify the pay differences between them.

Given the value of the claims, more appeals are highly likely.

Arguments of technical preliminary points (with multiple appeals at each stage) is par for the course for mass equal pay claims.

Many will have seen the cases over recent years in the NHS and local authority sectors. Some commentators argue that fighting lots of minor points and making multiple appeals is a deliberate tactic used by employers to delay the payment of back pay owed to women paid unequally.

No doubt the lawyers representing the employers would dispute this and would argue that the claimants need to prove their equal pay claims. Whatever the truth, for this reason, bringing equal pay claims of this nature, (or for that matter defending them) is not for the faint hearted.

About Andrew Gibson and Emma Ahmed

Andrew Gibson is a Partner and Emma Ahmed is a Professional Support Lawyer in the Employment Team at Hill Dickinson
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