United Kingdom: equal pay - retail employees allowed to run comparison with distribution colleagues at different sites

In brief

The UK Supreme Court has confirmed that Asda retail employees (who are nearly all women) can continue their claim for equal pay as compared to Asda's distribution centre employees (who are nearly all men). The fact that they worked exclusively at different sites did not prevent the comparison. The decision removes one potential hurdle for claimants in equal pay litigation.


Contents


Comment

The issue the court had to deal with was that Asda's retail stores are at different locations to its distribution centres, and there was an argument that this difference in location precluded the retail employees from comparing themselves to the distribution centre employees. The court rejected that argument, and confirmed that the comparison could be made, provided the terms and conditions for the two categories of employee would not significantly change if they did their work at the other category's place of work. The court described this proviso as a "weeding out" function, to deal with cases where differences between claimants and their comparators are due to geography rather than sex. However, importantly, it also said that this should not involve a prolonged enquiry, and that it is likely that it would only put a stop to an equal pay claim in exceptional cases. The court explained this further:

  • "The aim of the equal pay legislation is to remove pay disparities that are endemic in some pay awards and which do not properly reflect the value of the work for which they are paid." This means that "comparisons between employees who did not and never could work in the same workplace [are allowed]."

  • It does not matter that the hypothetical move would never happen in practice, or would be unfeasible. The court approved the hypothetical scenario that a distribution centre would be built next door to a retail centre, with the conclusion that it was therefore unlikely that the distribution employee wouldn't then retain the same terms and conditions as at his original centre.

Employers with similar structures to Asda will therefore need to have cogent evidence that terms and conditions are truly tied to location in order to be able to stop an equal pay claim at a preliminary stage.

Note, however, that the court did not have to address the situation where the employees were employed by different associated companies, which could present employees with another hurdle - where the question would be whether the terms and conditions of employment still derived from a single source (such as if a parent company controlled or could control the pay policy in both).

It is 7 years since the claims in this case first began, and a number of battles still lie ahead for the parties. In particular, the core task will be to determine whether retail distribution centre workers are undertaking work of equal value. This will require a lengthy and costly process to objectively compare the demands of the different roles. Asda's own counsel predicted that this would take until 2025, and if the women win that argument, we anticipate Asda would argue that the pay difference has come about for reasons which are not connected with the employees' sex. So it may be many years before we see the final outcome.

In summary, it is still important to analyse early on whether alleged unequal pay is attributable to a non-discriminatory factor such as geography. However, it is now more likely that this type of mass equal pay litigation will progress to the substantive stage of assessing whether work is of equal value, and all the time and cost that this entails.

Asda Stores Ltd v Brierley and others, Supreme Court

Contact Information
Rachel Farr
Knowledge Lawyer at BakerMcKenzie
London
rachel.farr@bakermckenzie.com
James Brown
Knowledge Lawyer at BakerMcKenzie
London
james.m.brown@bakermckenzie.com
Mandy Li
Knowledge Lawyer
London
mandy.li@bakermckenzie.com

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