Asda loses its appeal in the initial stages of a multiple equal pay case

Asda has been in the news recently regarding an equal pay case in the Employment Appeal Tribunal (“EAT”).  The case has been brought by a group of predominantly female shop workers who are claiming equal pay to a group of largely male distribution workers.  Asda appealed an employment tribunal decision on a preliminary issue relating to comparators.  The EAT has rejected Asda’s grounds of appeal and the claims will now continue in the employment tribunal.  So, what can we learn from this initial decision, and what are the implications for any future claims?

As a brief background, when bringing a claim for equal pay the claimant has to establish a number of grounds in order to bring her claim.  One such ground is to identify a comparable male worker who is working “in the same employment”.  She then would need to go on to establish whether the work performed by this comparator is “like work”.

Men and women are considered to be in the same employment when they are employed by the same employer or by an associated employer at the same establishment, or, at different establishments where common terms of employment apply.

Asda argued that the claimants could not draw a comparison between themselves and workers in distribution centres because the two groups of workers’ pay rates are set using different methods. The EAT considered whether the warehouse operatives and the shop workers were engaged on ‘common terms’ of employment.  The EAT found that the warehouse operatives’ rates of pay were set mainly from collective bargaining made on their behalf by the trade union.  In contrast, the shop worker’s pay was set by a board, or sub committee.

The EAT clarified that the comparator does not need to be engaged at the same site as the claimant; she only needs to establish that there is a single source responsible for setting pay (and responsible for addressing any inequality) for both groups.  It found that there was.

However, this is far from the end of the matter and Asda appears to be resolute in fighting this action. A spokesperson has stated:

“The employment tribunal has yet to consider whether the jobs are of equal value in terms of their demands and if some jobs are, only then will the tribunal move on to consider the reasons for the differentials, including the existence of different market rates in different industry sectors.”

Asda has apparently been given leave to appeal the EAT decision and we will have to wait and see whether it continues to fight these claims.

The issue of gender pay disparity is currently a hot topic, especially following the introduction of the Gender Pay Reporting obligations which were brought in last April.  This case has received a great deal of negative media attention for Asda.  Tim Roache, GMB general secretary, added: “GMB look forward to Asda management sitting down and finding a sensible negotiated solution to recognising that our female members in stores should be paid and valued as equal to the men.

Instead of wasting money on litigation, we ask Asda to be a market leader in solving this wide-ranging industry problem.”

In addition, Jeremy Corbyn, leader of the Labour Party has recently taken to twitter:  “A fantastic blow struck to those underpaying their workers. Cough up Asda & pay your staff the money you owe them.”

Issues of inequality of pay have been present in the public sector for a number of years and it has generated a significant amount of complex litigation.  As these claims are now being raised by workers in the private sector, companies should review the pay structures of their workers to ensure that if any disparities in pay exist, they are able to justify these differences in line with the Equality Act 2010.  This will mean identifying any groups of predominantly male workers who are paid more than any predominantly female workers.  If the work carried out by the two groups of workers could be considered like work, and if disparities within these groups exist, employers should then scrutinise why such a disparity exists, and if any legal explanation could be provided.

Equal pay claims are complex, time consuming and expensive. Should you have any concerns regarding any pay disparities within your organisation, please get in touch.

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