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Equal Pay - What Can You Learn from the Asda Case?

on Friday, 15 September 2017.

The tribunals have confirmed that over 7,000 predominantly female Asda retail staff can compare themselves to predominantly male distribution centre colleagues for the purposes of equal pay claims, potentially worth more than £100million.

It is well established that men and women should receive equal pay for equal work. There are three categories of equal work: 'like work', 'work rated as equivalent' and 'work of equal value'.

The Asda Case

The retail staff are claiming that the work they perform is of equal value to Asda as the work performed by the distribution staff.

In order to succeed in their claims, the retail staff need to select appropriate comparators of the opposite sex who they say are carrying out work of equal value to their work. The comparators will then be used to assess whether there is any pay discrepancy.

An Employment Tribunal found that the retail staff could use the distribution staff for comparison purposes. Asda appealed, arguing that the distribution staff are not appropriate comparators as different parts of the business run its shops and its distribution centres, with different pay scales in place.

The Employment Appeal Tribunal has now rejected Asda's appeal. It has confirmed that the distribution staff can be used as comparators. The EAT based its decision on the fact that both the retail staff and the distribution staff are employed by Asda and their pay is controlled by Asda's executive board, overseen by parent company Wal-Mart.

Asda has already applied to the Court of Appeal for permission to appeal the EAT's decision and, given the value of the litigation, may well proceed to the Supreme Court if necessary. Even if the issue of comparators is settled in favour of the retail staff, an Employment Tribunal will have to determine whether the work performed by the retail staff and the distribution staff is truly of equal value to Asda's business and, if it is, whether any variation in pay can be justified on objective grounds. 

What Does That Mean for You?

Although the litigation is ongoing, valuable learning points can be taken from the Tribunal decisions to date:

  • Private sector employers are not immune from large scale equal pay claims. Employees are increasingly alive to pay issues, particularly given the new Gender Pay Gap Regulations which are now in force.

  • Employers should not assume that separate divisions of their businesses will not be linked for the purposes of equal pay and may wish to review pay practices across their entire businesses through conducting an equal pay audit.

For more information, please contact Jessica Scott-Dye, in our Employment Law team, on 0117 314 5652. 

 

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