Asda loses preliminary equal pay hearing

The Supreme Court has upheld a previous Court of Appeal decision that retail workers can compare pay terms for the purposes of an equal pay claim to distribution workers, due to common terms applying at the establishments.

Around 30,000 predominately female retail workers have submitted equal pay claims against ASDA, alleging they were not receiving equal pay in comparison to the pay terms afforded to predominantly male distribution employees. They argued that the roles of retail workers, and those working in distribution, are similar enough to warrant an equal pay claim.

Before it could hear their actual equal pay claim and therefore determine whether pay is related to gender, it was necessary to establish if a comparison could be made between the two groups. Both the Employment Tribunal (ET) and the Employment Appeal Tribunal (EAT) determined that the retail workers could compare their pay terms to those applying to distribution workers. ASDA appealed to the Court of Appeal, who dismissed their appeal.

The Court of Appeal (CA) assessed key matters under domestic law when determining whether common terms apply at the establishments. They found that common terms do not require all the terms that apply to relevant employees to be common. Instead, taking a common-sense approach, “broadly common” terms will satisfy this requirement.

Applying this to the case in question, the CA highlighted that common terms applied to all retail workers employed at retail sites. Notwithstanding the slight pay variation between depots, there were also common terms applied to all distribution employees working at distribution sites. As common terms and conditions applied to the relevant classes, regardless of where they actually worked, the CA held that the ET and EAT had correctly determined that retail workers could compare their terms against those of distribution workers.

ASDA appealed further to the Supreme Court (SC), who again dismissed their appeal. Agreeing with the CA, it was found that the conditions of retail workers and those in the distribution centres could be comparable even if the groups were not based at the same establishment.

The SC explained that the correct test, from existing case law, was to establish whether the comparator, if employed to do their job in the claimant’s establishment, would do so under existing terms and conditions. The ability to compare employees across sites is there to prevent organisations from avoiding a successful pay claim on this basis.

The SC went on to outline that the original ET had considered the wrong question by carrying out a line-by-line comparison of the terms and conditions of employment between the two groups. What they should have done is establish a broad comparison by seeing if the terms were substantially the same. This was necessary in order for comparisons to be made that otherwise may not have been due to geographical or historical factors.

That said, as the ET had correctly concluded that distribution employees would have been engaged on mostly the same terms if they had been engaged at the claimant’s site, the SC did not interfere with their ruling.

The claimants are now free to return to the ET to have their equal pay case heard. ASDA is still able to make the argument that there is a material difference between the roles which justified the disparity.

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