Asda workers win appeal in flagship equal pay case

Done – finding the comparator and demonstrating ‘common terms’

This Supreme Court ruling is the latest development in the long-running court battle for women workers at Asda stores to be paid the same amount as men in equivalent positions in Asda distribution centres.

The issue to be decided was whether the claimants had identified a correct comparator for their equal pay claim. To bring an equal pay claim, employees indeed can compare themselves with a comparator of the opposite sex who is performing work of equal value.

So, the first step is to decide who the comparator is.  The claimant and comparator must be in the “same employment”, which means that they are employed by the same employer or by associated employers. They must also be employed at the same establishment, or at different establishments where “common terms” apply.

The claimants were employees at Asda stores and had identified their comparators as employees at Asda’s distribution centres. The claimants and comparators did not work at the same establishment and were employed on different terms and conditions. Therefore, the question for the court to decide was actually whether “common terms” applied.

In making its decision, the Supreme Court had to ask itself a hypothetical question – what terms would the comparator be employed under if he was transferred to the same workplace as the claimant to do his job? If the answer is that there would be no change in the terms, the jobs are capable of comparison.

The Supreme Court concluded that the distribution employees would continue to be employed on the same terms even if they carried out work at the same place as the retail employees. It confirmed that the hypothetical question involves a broad consideration of terms, and that it is not necessary to conduct a detailed comparison of both sets of terms and conditions.

This means that the claimants won the first step of the equal pay claim with no further right for Asda to appeal – but they still have some way to go in recovering any backpay from their employer.

Next – establishing work of equal value and gender as the disparity cause

The next stage of this long-running case will be for the Employment Tribunal to consider if the roles are of equal value. After that, the tribunal will consider if there were reasons other than gender behind the pay disparity between retail and distribution workers.

If Asda continue their approach to defending this claim, it’s likely that each stage in the claim will be appealed as far as the Supreme Court (assuming the courts do not find in Asda’s favour).

It’s unlikely that there will be a final decision in this case for many years. However, if the ultimate outcome is in the claimants’ favour, Asda will eventually be forced to pay out millions to the successful claimants.

What impact on the wider retail sector?

Given that the consideration only needs to be whether the same terms would apply even if the workplace changes, it is possible that Supreme Court’s application of the threshold test in the Asda case could also apply to other types of retailers.  But whether the workers’ equal pay claim is ultimately successful or not will be fact specific, so at this stage it is difficult to say whether the latest Supreme Court decision opens the floodgates for claims in other parts of the retail sector.

One thing is sure though – the debate is open, and employees are starting to think wider in terms of comparators for equal pay claims. If you would like to conduct equal pay audits across your business, to consider any differences in pay between men and women in potentially comparable roles, we can do that for you.

The decision also comes just as 2020/21 gender pay gap reports are due. If yours shows that there is a pay gap in your organisation, we can help you to find out the underlying causes and to put an action plan in place to reduce that gap.

If that’s of interest, don’t hesitate to get in touch at a.christen@capitallaw.co.uk.