Equality of pay across classes of retail workers takes a significant step forward

1st February 2019

The first stage of an equal pay claim brought by female shop workers at Asda, to establish whose pay they can use for comparison, has been decided by the Court of Appeal.

There were two principal aspects to the case brought by Asda employees; an equal pay issue but also use of the multiple claim process in the Employment Tribunal on a single form. The second issue was decided by the Court of Appeal (CA) last week, which found that the multiple claims in this litigation were not based on the “same set of facts”, as rule 9 of the Employment Tribunal Procedure Rules requires for multiple claims to be submitted on the same form. This was of particular significance when the claims were issued because fees were payable in the employment tribunal at that time.More significantly today, the CA has upheld the claims by female Asda shop workers that it is appropriate for them to compare themselves for equal pay purposes with depot workers at different locations (those workers being predominantly male and on higher pay). See judgment here.

Background

UK equal pay legislation hinges upon female workers establishing they work “in the same employment”, which turns upon being able to show they are employed “at the same establishment” as male employees or at different establishments where the employer applies common terms and conditions of employment either generally or for employees of the relevant classes.

The ET decision under appeal before the CA had ruled that the female shop workers could legitimately bring equal pay claims on the basis Asda applied “common terms” across its establishments and operated a “single source” of pay. Due to those findings of fact, Asda was always going to have an uphill struggle to get that decision overturned. Today, the CA has followed the EAT in declining to interfere with the ET judge’s conclusions, albeit questioning the ET approach.

CA decision: depot workers = appropriate comparators

The CA has concluded:

  • Identifying relevant “common terms” does not require a term by term comparison as between one worker and another in order to establish the suitability of the comparator –an approach adopted by the ET in this case. There will be cases where it is possible to decide that terms are common between two establishments without knowing what they are. For example, there may be employer manuals or documents in existence which set out universal terms and conditions for all staff and prove sufficient cross-establishment commonality. In the absence of such a document, it may be necessary to go through the actual terms at each establishment for employees in the relevant classes to see if they differ but that does not require comparison between the terms of the claimant and comparator classes.  
  • In this case, both the shop workers and distribution workers were subject to common terms and conditions, wherever they worked. Therefore, the effect of pre-existing case law, in the view of the CA, is that these terms would also apply in principle to workplaces where they might never actually work (for operational or other reasons), which would include a hypothetical move in-store. Had there been no common terms for the distribution workers and these were determined by each location, then the outcome would be different as it would be impossible to say, “if a distribution worker worked in store these are the terms that would apply”.
  • The Claimants’ and the comparators’ terms had a single source on the basis they were set by the same employer, which had the power to equalise them. The CA agreed with the ET that Asda’s argument that the terms for shop workers and for depot workers were arrived at by different management teams and via different processes failed: the Board of Asda being in ultimate control.

Comprehensive analysis of the law and previous case law in this area is set out in the judgement should practitioners or interested parties wish to read into the law more extensively.

Comment

It is important to remember that the judgment, although a significant reiteration of the findings of lower courts, represents the first hurdle only in the Claimants’ equal pay claims. The judgment concerns only whether the Claimants are entitled to compare themselves with employees in the distribution operation at all. Having concluded they are so entitled, it now remains to be established whether the Claimants do work of equal value with their comparators and the extent to which Asda might have any legitimate defence (i.e. a non-gender material factor justifying the pay differential). Given the high costs implications for Asda, were they obliged to provide parity of pay between depot and shop workers, as well as the significant sector and broader employment consequences, it seems likely this litigation will be keenly defended to the end, which could yet be very many months away.

For more information contact: Shirley Hall

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