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Asda: The supermarket might not ‘save money’, but their employees could ‘live better’

The Supreme Court continues to churn out newsworthy employment law cases and in its most recent judgment, has decided that Asda’s shop staff can compare their work to Asda’s warehouse staff. It is important to note that this case did not determine that shop staff should be paid the same as warehouse staff, only that they are indeed comparators for the purposes of bringing an equal pay claim.

This equal pay case was first heard at the employment tribunal in 2016. The claim was brought following discovery that Asda’s warehouse workers, who were mostly male, were being paid more than female store staff. With c.35,000 claimants, it was no surprise that Asda defended the matter in full, owing to the potential financial liability of a judgment against them.

At the employment tribunal, the initial issue to be determined was whether the store workers could in fact compare themselves to the warehouse workers. If the store workers could not pass this hurdle, they would in all reality fail in their claims. In its initial ruling, the employment tribunal confirmed that Asda’s shop staff could compare themselves to warehouse staff.

Although this ruling related solely to one of the many tests required to be successful in an equal pay claim, Asda immediately appealed. Following judgments against them at every stage, the matter eventually reached the Supreme Court.

In the Supreme Court judgment, the statutory test on who can classify as a comparator was discussed in good detail. In short, the Supreme Court decided that, on the facts of the matter, the test required the following to be met:

  1. B (the warehouse staff) were employed by the employer (Asda) of A (the shop staff);
  2. B works at an establishment other than where A works (the distribution centres); and
  3. Common terms apply at the establishments.

In considering the initial employment tribunal judgment, where it was found that the warehouse staff would have been employed on substantially the same terms if they had been employed at one of the shop staff’s sites, the Supreme Court confirmed that it did not have to be ‘feasible’ for the hypothetically relocated warehouse staff to be able to carry out their role at the shop staff’s establishment. As such, the Supreme Court upheld previous judgments that warehouse staff were suitable comparators for the shop staff.

Whilst the victory has been heavily lauded by unions, the Supreme Court judgment is just the first hurdle in what is going to be a lengthy legal battle which will likely last a number of years before we get a final outcome. As noted in the judgment, the claimants must still show that they performed work of equal value and hope that Asda are unsuccessful in any defence open to it, including (if appropriate) the statutory defence that the difference in pay was due to a genuine “material factor” which was not itself discriminatory on the grounds of sex.”

We await to see what arguments will be raised by Asda as this matter moves to the next round.

This case has been a test case for many similar cases being heard over the country for supermarkets and retailers alike. This judgment, in relation to comparators, means that claimants are more likely to pass this hurdle and respondents will likely be focusing their defences on remainder of the test for equal pay moving forward.

What does this mean for you or your business, and what do you need to be doing now?

This case doesn’t have many damaging ramifications for employers…yet. There is a long and expensive road ahead for both parties to determine whether or not there is any justification to pay staff differently at different sites and we don’t know whether the staff will ‘pocket the difference’. Nevertheless, it does open the door for comparison amongst differing roles, and so employers should look at their existing terms and conditions and consider whether they can justify the differences. If you do have concerns on equal pay, contact a member of the employment team to discuss how to mitigate the risk to your business of a costly claim.

Recommended Reading

The link to the case can be found here.

 

These notes have been prepared for the purpose of articles only. They should not be regarded as a substitute for taking legal advice.

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