Customer facing workers v distribution workers – Equal Pay Comparators

The Equality Act 2010 implements the principle that men and women should receive equal pay for equal work. There are three categories of work being: “like work”, “work rated as equivalent” and “work of equal value”. A person who brings about a claim must have a comparator. The current law is that a comparator in an equal pay case must be real, not hypothetical and the Supreme Court has held that under the previous legislation where no comparator works at the claimant’s establishment, a comparison may be permitted if the comparator would have been employer on broadly similar terms if they were asked to do their job at the claimant’s location.

Summary

Clarity has been given by the Court of Appeal in the procedure for large equal pay claims brought about by many joint parties and on determining who can be a comparator for equal pay purposes. Asda is facing one of the biggest equal pay claims brought about by over 5,000 retail employees who are being paid significantly less than their colleagues in the distribution part of the company but were being challenged whether they were entitled to be ‘comparators’. The Court has held that they are entitled to compare, despite the distribution part of the business being under a separate management structure as there are common terms of employment between the workers. Asda Stores Ltd v Brierley [2019] EWCA Civ 44

Facts

Asda Stores Ltd is facing a large scale equal pay claim brought about by over 5,000 retail employees across 22 claim forms, who are predominantly women (‘Claimants’). The Claimants wish to compare themselves with higher-paid employees in distribution depots, who are predominantly male. The distribution depots are operating under a different management structure and a preliminary hearing was brought to determine whether they can be a comparator for equal pay purposes.

The Employment Tribunal held that the retail employees were entitled to compare themselves to distribution employees for the purposes of their equal pay claim and Asda appealed. The Employment Appeal Tribunal dismissed all grounds of appeal and upheld the Tribunal’s decision in full.

Asda indicated that they would appeal to the Court of Appeal on this preliminary legal issue.

Outcome

The Court of Appeal focused on using multiple claimants who have varying roles bringing about a claim jointly, they decided that claimants should be carrying out the same work, it was not necessarily the job title that must be the same, but gave the example that joint claims from a checkout operator and a bakery assistant could not be based on the same facts.

It was not necessary for each claimant to rely on the same comparator. A single claimant was entitled to rely on several alternative comparators so long as they were all working at the same establishment or employed on the same common terms and conditions.

There were common terms between workers in both the warehouses and supermarkets, so the claims could proceed. The Court also held that the claimants would be entitled to draw the comparison under European law because there was a “single source” for their and their comparators’ terms. This was because the Asda Executive Board was ultimately responsible for pay across the two groups of worker.

The Court of Appeal was silent on Article 157 of the Treaty of the Functioning of the European Union, which provides the principle for equal pay between men and women for equal work and whether it has direct effect in English law. Asda’s appeal to the Supreme Court has been refused.

Implication for Employers

Supermarkets are some of the biggest employers in the UK, so this case could have wide reaching effects across the FMCG sector. At the date of the initial Employment Tribunal hearing, Asda had 133,000 employees of which 11,600 work in distribution centres and depots and these have been in-house since 2003. The stakes are high as this equal pay dispute continues as it is reported the sums in issue in these proceedings could exceed £100m. In addition, if the Claimants are successful there are piggyback claims by male workers who will seek to be paid the same for performing equal work.

Employers with any segregation in their workforce should be mindful that this ruling by the Court of Appeal means it is easier for staff to compare themselves with the opposite sex who may do different work but have common terms and conditions. This ruling could give rise to many claims for the largest employers in the country if there is a feeling of pay disparity.

This case is ongoing and can proceed to the next stage of determining whether the work the two groups undertake is of equal value.