318: Supreme Court rules on Asda equal pay claims

The Supreme Court has ruled that a group of predominantly female retail employees could compare themselves with a group of mainly male warehouse employees for the purposes of bringing an equal pay claim against Asda (Asda Stores Ltd v Brierley and others).

Thousands of Asda’s retail employees are bringing an equal pay claim because they receive up to £3 per hour less in pay than their distribution colleagues for what they argue is equal work. Asda argued that the employees working in distribution are not appropriate comparators for retail staff because they work at separate locations, are employed on different terms and conditions of employment and have their own distinct skill sets. However, the Employment Appeal Tribunal, and now the Supreme Court have agreed that the claimants are entitled to use such staff as comparators.

The Supreme Court has confirmed that where a claimant has no actual comparator working in their establishment, the key question is whether a hypothetical comparator would be employed on similar terms if they were employed in the same establishment. In this case, it was held that Asda’s distribution staff would have been employed on the same or largely the same terms as the retail staff if they were based at the same sites. They were therefore appropriate comparators.

This decision means that the threshold for claimants to establish that a hypothetical comparator is employed on common terms is relatively low, and the Supreme Court indicated that most equal pay cases will pass this threshold test. The next step for the claimants is to establish that retail work and distribution work are of equal value. If this argument is successful, the Tribunal will then need to consider whether the difference in pay constitutes unlawful sex discrimination, or whether Asda has a non-discriminatory justification for the difference. It is reported that around 45,000 current and former retail employees have joined the equal pay case against Asda, and other leading supermarkets as well as Next are facing similar claims. If successful, these employees could be entitled to receive up to six years of back pay. This illustrates the significant financial and reputational risks involved in equal pay claims, which are notoriously complex and often take many years to resolve. In order to minimise the risk of equal pay claims, all employers should conduct regular reviews of terms and conditions and employment practices across all sections of their business.