The Equality Act 2010 says that employers must provide men and women with the same contractual terms, including pay, when doing work of equal value. In October 2016, approximately 7,000 people succeeded in the first part of their claim against Asda for equal pay in Brierley and others v Asda Stores Ltd, determining whether their choice of comparator was valid.
The Employment Appeals Tribunal upheld the tribunal’s decision that Asda’s female retail store workers can compare themselves with male workers in the distribution centres, allowing them to proceed with their claims. The claimants are predominantly female store workers who contend that their pay should be compared to their colleagues in the distribution centres, who are largely male.
Their male counterparts working in the warehouse earn between £1 and £3 more an hour.
The claimants argued that the work carried out in retail stores is traditionally perceived as ‘women’s work’, as opposed to the work of their colleagues in the distribution depots, which is perceived as ‘men’s work’. In reality, the claimants argue, their work is of equal value to that of the warehouse workers.
Comparators and the Equality Act 2010
In a preliminary hearing, Asda tried to argue that the claimants’ claims should be struck out because the store staff could not compare themselves with their chosen comparators (distribution staff), because the stores and the distribution centres were in different locations with different pay arrangements.
As a preliminary issue, the tribunal had to determine whether the terms under which the two sets of employees worked were similar enough to provide for a comparison.
The tribunal considered the relevant tests to determine whether the distribution staff could be used as a comparator. It was found that there was a necessary ‘single source’ in relation to pay, as a single body determines the pay of both sets of employees and is in a position to rectify any inequality. This is because the pay for all employees is controlled by Asda’s executive board and overseen by parent company Wal-Mart.
The tribunal also found ‘common terms’ in the terms of employment for both sets of employees. Employees in both roles were paid on an hourly basis and the handbooks of the respective employees were broadly similar. The outcome was that the tribunal found that the store workers could use the distribution workers as comparators.
As Asda commented following this outcome, the tribunal would now have to determine whether or not the work carried out in the distribution centres is of equal value to the work in the retail stores.
Equal pay claims
‘Equal value’ means that, although the employee and their comparator do different jobs, the employees’ job has the same demands, such as effort, skill and decision-making.
If it is found that the work carried out is of ‘equal value’ and the claims are successful, Asda may have to pay compensation of £10 million to employees going as far back as 2002 and relating to around 150,000 employees.
Counsel for Asda commented that the “ripple effects of the case will be huge” and would have “the single largest effect on the economy of the UK in recent years.”
This case has the potential to open the floodgates for equal pay claims in major retailers across the UK, particularly ones that operate distribution centres with different pay regimes. These retailers should take great care in ensuring that they should not only pay employees in the exact same role the same pay, but also those employees doing work of the same value.
The decision may also affect all sectors of employment. Following the BBC’s recent accusations of discrimination about their gender pay gap, it is likely that big market players will be expected to reveal similar discrepancies.
For more information on the Equality Act 2010 or any of the other issues raised in this article, contact our Leeds Employment Law team.