The Court has ruled that Asda employees in the retail stores can compare themselves to those employees working in the supermarket's distribution depots under the Equal Pay Act 1970 and Equality Act 2010. This is despite the comparators working at different establishments.
Over 7,000 predominantly female staff employed in Asda retail stores brought an equal pay claim in the Employment Tribunal and sought to use higher-paid, predominately male Asda distribution depot workers as their comparators.
Asda has maintained its position that distribution staff are not appropriate comparators, broadly speaking on the basis that those employees working on the shop floor are employed at different establishments and on different, although not materially different, terms and conditions of employment.
The Supreme Court has now dismissed Asda’s appeal.
In dismissing Asda's appeal, the Supreme Court in particular confirmed that, where there are no comparators at the claimant's establishment, the 'North hypothetical' principle (established in Dumfries and Galloway Council v North) can be applied to consider whether the comparators would have been employed on similar terms to those they are currently on at their own establishment, had they been employed at the same site as the claimant.
Despite working in entirely different establishments, the retail store employees can therefore use the distribution workers as their comparators to assess whether the latter would have been employed on similar terms to those they are currently at the distribution depots had they been employed in the supermarket retail stores.
However, despite concluding this question of comparability, the Supreme Court has emphasised that the retail workers must still go on to show that they have performed work of equal value. In response, Asda is likely to deploy arguments to show that a difference in pay is justified because the value of the claimants and comparators work when compared is not of equal value. The supermarket would also be able to use the 'genuine material factor' defence if there is a valid non-discriminatory reason for the difference in pay.
The case will therefore be referred back to the Employment Tribunal for the tribunal to evaluate whether the work of the claimants and comparators is of equal value and whether a 'genuine material factor' defence would be permissible.
The Supreme Court's ruling shows that the comparator in equal pay claims does not have to be employed on identical or the same terms as the claimant. A broad comparison is instead needed to determine whether the terms enjoyed by the comparator at a different establishment would substantially be the same at the claimant's and comparator's sites.
Employers will still have the opportunity to defend equal pay claims, by showing that the claimant's and comparator's work is not of equal value, or by using the 'genuine material factor' defence where an employee is paid less than a comparator of the opposite sex performing equal work for a non-discriminatory reason.
We will therefore await future judgments as the case is referred back to the Employment Tribunal to determine whether the work of the retail and distribution workers is of equal value. The case's ultimate conclusion is expected to have a profound effect on equal pay claims going forward.