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Following an already protracted equal pay battle, Asda’s retail workers are now one step closer to success following the Supreme Court ruling in their favour. It has been confirmed that retail employees, including shop floor workers and other front of house staff, can be compared with employees who work in the distribution centre. The next step for the retail employees is to prove that the retail workers and distribution workers are of “equal value.”
Background
Under the Equality Act 2010, men and women should receive equal pay for equal work; for this purpose, an employee can compare themselves with a comparator of the opposite sex who is performing work of equal value.
In order to bring a claim, a claimant and their comparator must be employed by the same (or an associated) employer. They must also be employed:
- at the same establishment; or
- at different establishments at which “common terms” apply.
For this “common terms” test, it is crucial to show that, if the comparator transferred their job to be in the same establishment as the claimant, their terms would not change. If that would be the case, the two jobs can be compared. This is known as the “North hypothetical test”.
Facts of the case
The supermarket giant, Asda, employs over 130,000 staff. Thousands of Asda’s retail employees have brought equal pay claims. These employees (the Claimants), who are mainly women, have argued that they should be paid at the same rate as their distribution colleagues, who are mainly men. For clarity, none of the retail sites and distribution depots are connected.
Asda, responding to these claims, contended that the two groups of employees are not employed on “common terms” as the retail and distribution locations are separate from one another and the employees at the different types of location have different terms and conditions of employment.
The Claimants succeeded before the Employment Tribunal and Asda unsuccessfully appealed to both the Employment Appeal Tribunal and the Court of Appeal.
Supreme Court Decision
The Supreme Court had to decide whether the (predominately female) retail employees could use the (predominately male) distribution employees as comparators under the “common terms” requirement of the Equality Act 2010.
The Supreme Court commented that because there are no actual comparators in this case, it must be considered whether hypothetical comparators would have been employed on similar terms if they were employed in the same establishment as the Claimants. It was held that the distribution workers would have been employed on largely the same terms as the retail workers if they were based at the same site.
This decision has clarified that the threshold for the “common terms” test is relatively low and, as a result, Asda retail workers can now compare themselves to distribution workers to decide whether they should receive equal pay.
What this means for employers
Obviously, this result is good news for the Claimants. However, they have only passed one hurdle in a very complex case, which now returns to the Employment Tribunal for consideration of the further elements of the equal pay test. Since the judgment, Asda has given a statement to confirm they intend to continue defending these claims and that they consider retail and distribution workers have “their own distinct skill sets”.
We will update you in due course as to how this case develops. However, it is already a good reminder for employers, regardless of whether or not they are in the retail sector, to take the opportunity to review pay across all areas of their business, to try to limit the risk of being the subject of a similar claim in the future.
This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact Emily Edwards to discuss any issues you are facing.
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