Equal pay and comparability of pay terms

Asda Stores v Brierley

For the purposes of equal pay law, two distinct parts of a workforce (here female shop floor workers and higher-paid male distribution centre workers) can compare their pay, even if they are located at different sites, in different parts of the organisation/group, and with very different pay arrangements/management structures.

Background

For equal pay comparisons, claimants and their comparators need to be working at the same establishment, or at establishments at which ‘common terms’ are observed.

In 2016 many thousands of predominantly female store staff in Asda took a tribunal case claiming that their work was of equal value to that of predominantly male Asda employees working in its distribution centre. Asda argued that the law doesn’t permit such a role comparison because the shops and distribution centres are run by different departments and the rates of pay were set using a different method. The tribunal rejected Asda’s defence and held that such a comparison was possible. Asda appealed. In a highly technical judgment, the EAT rejected the appeal. The store workers’ pay ultimately came down to a single source and as a result their pay can be compared as part of an equal pay claim. Whilst many equal pay claims will be brought based on a comparison with others employed on the same site or from within a single employing entity, this is not technically required for a claim held the EAT. What is needed is a single body responsible for the inequality in pay and that body must be one that could restore equality of pay if they wished. Asda again appealed.

Court of Appeal decision

The appeal was dismissed. While the tribunal judge had gone awry in the way he approached the issue, within his findings was a clear conclusion that, for both classes of employee, Asda applied common terms and conditions wherever they worked, which was sufficient to establish comparability.

The Court of Appeal looked first at the ‘common terms’ test in UK law. It held that:

  • common terms must apply as between the two establishments, not as between the claimant and comparator
  • common terms apply at the different establishments not only when they apply to actual employees in the relevant classes working there but also when they would apply, even if employees of a particular class would never actually be employed at one of the establishments
  • the test does not require all terms to be common, it is enough that they are broadly common, and
  • it is irrelevant whether there is any actual similarity between the terms of the two classes of worker - the test is whether the terms of each class of worker would be the same regardless of which establishment at which the workers were employed

Although it didn’t need to (because it disposed of the appeal by deciding the issue under UK law), the Court of Appeal, endorsing the EAT’s approach, commented that the claimants would also be entitled to the comparison under European law because there was a ‘single source’ for their and their comparators’ terms.

Link to judgment: https://www.bailii.org/ew/cases/EWCA/Civ/2019/44.html

Comment

This is the largest ever equal pay claim against a private employer – and it could run and run. The Court of Appeal refused leave to appeal but Asda has indicated it will petition the Supreme Court to be allowed to do so. Add in the fact that we’re still dealing with preliminary issues and the substantive aspects of the case have yet to be decided upon – and months/years of litigation look likely (unless Asda settles of course).

With the abolition of tribunal fees, such mass actions for equal pay may well increase. The introduction of gender pay reporting means more information on gender pay is available with the perhaps inevitable result that this issue is only likely to pick up steam. It’s reported that many other claims are awaiting the result of this case.