Fri 23 Apr 2021

Asda case: women working in stores can compare their pay with male comparators in distribution centres

In its jud…; handed down on 26 March 2021, the Supreme Court has unanimously dismissed Asda Store Ltd’s ("Asda") appeal and held that the 35,000 claimants, predominantly female employees working in retail, can use male employee counterparts working in distribution centres as comparators for the purposes of an equal pay claim.

The basis of the equal pay claims is that the predominantly female retail employees are paid less than male employees working in distribution centres despite both groups of employees doing work of equal value. Asda's position is that the distribution employees were not valid comparators since they worked at different locations to their retail counterparts and weren't employed on "common terms" within the meaning of the legislation. The "common terms" test derives from section 1(6) of the Equal Pay Act 1970 and section 79(4) of the Equality Act 2010.

It was for the Supreme Court to establish whether the test was met between the retail employees and their distribution comparators, "either generally or for employees of the relevant classes". The Court's approach was to apply the "North Hypothetical", which poses the question as to whether the male comparators would continue to be employed on "the same or substantially the same terms" as their current terms if they were employed at the Claimant's place of work in their existing role.

The Supreme Court held the Employment Tribunal (ET) was entitled to conclude that the male employees' terms would not have changed in this hypothetical scenario. As part of the judgment, the Supreme Court also provided guidance on future issues raised by the "common terms" threshold test. It expressed the view that ETs needn't allow a prolonged enquiry, and that ETs needn't perform a line-by-line comparison of the terms and conditions in question as the answer may be found in the relevant facts and circumstances of the case.

In short, Asda's position on "common terms" was rejected for the fourth and final time (having previously been rejected by the Employment Tribunal, the Employment Appeal Tribunal and the Court of Appeal). This is also the last in a long line of preliminary challenges to the claimants' case that Asda has brought since the claims were brought in 2008. The claims will now proceed to determine whether the work done by the claimants is in fact of equal value to that of their comparators. This process is likely to be very lengthy and even if the claimants are successful in demonstrating equal value, Asda will then have the opportunity to argue that they have a gender neutral defence which explains why they pay men more. The case is thought to be worth hundreds of millions of pounds and demonstrates the complexity that both employers and employees face in litigating equal pay claims.

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