Asda Equal Pay Case

Asda supermarket workers’ long-running equal pay case was heard by the Supreme Court justices at a virtual hearing in July. The judgement is set to be delivered shortly. The claim was brought by around 35,000 employees represented by legal firm, Leigh Day.

This is not the first time that Leigh Day have appeared in the Supreme Court with an equal pay case. In 2012, they brought a successful claim against Birmingham City Council on behalf of female employees claiming they were doing an equivalent job to their male counterparts. In that situation, the key questions were around time limits. The Asda case is the first mass claim to be brought against a private sector employer since the 2012 Supreme Court ruling.

In the Asda case, the predominately female Asda retail workers are asking to be paid the same rate as the predominantly male workers who work in the supermarket’s distribution warehouse depots, and who receive a higher wage. Asda does not believe the retail workers are entitled to compare themselves with higher-paid warehouse staff. The case is the biggest ever equal pay case in the private sector.

Asda’s legal team told the supreme court that the case depended on whether the store workers were “in the same employment” as those at the firm’s distribution depots. They said that Asda’s position was that the retail workers and distribution workers were not in the same employment and that the terms and conditions of the workers depended upon the “establishment” in which they worked. The legal team went on to outline that “The different types of establishment operate in different geographical locations, in different industries and with different pay-setting processes”.

Even if the supreme court justices’ rule in the workers’ favour their battle for equal pay will not end, as the retail employees will still have to show that their roles, and the distribution roles, are of equal value. Leigh Day have said that the supermarkets could face pay outs of £8bn if they lose the cases.

So how is the case likely to be found? In City of Edinburgh v Wilkinson the Court of Session had to consider the definition of ‘establishment’ and employment on common terms and conditions for the purposes of the old Equal Pay Act 1970. A number of women employed by a council in a range of jobs for example, in schools, social work and libraries, brought equal pay claims. Their comparators were manual workers, including gardeners and refuse collectors.

The Court of Session held that the female claimants could compare themselves with the men employed on common terms and conditions, but working in different locations, even though they were not at the same establishment. They also said that the two groups were employed on common terms and conditions.

Some of the key points to come out of the City of Edinburgh v’s Wilkinson case were that:

 All employers should consider equal pay audits to check their organisation’s pay structures are transparent and non-discriminatory and employers who do not carry out audits are more vulnerable to equal pay claims to those that do not.
 That desk-based workers could compare their work with a group of manual workers for the purposes of an equal pay claim.
 That workers in different locations can compare themselves with each other for the purpose of an equal pay claim.

That case related to the Equal Pay Act 1970, which has now been replaced by the Equality Act 2010 but the language in the equal pay code of practice is similar and uses similar terms, so it is likely that the decision is still helpful.

As the Wilkinson case was decided at the Court of Session, the Supreme court is not bound by it when making its decision on the Asda case. It could reach an entirely different outcome. The interesting question is, will it? The Asda claimants have been successful at every stage of their claim so far. Will the Supreme Court carry on the existing direction of case law, which is more focussed on job content and the work done by the employee, or look to external factors, for example, the establishment or geographical region that the work is carried out? Arguably, this is something that should be considered later as part of a material factor defence rather than a preliminary point.

It is also worth bearing in mind the status that retail workers in supermarkets have achieved in recent times. They have been called heroes, are considered key and essential workers. Will the Supreme Court undermine that status by stopping their claim from proceeding any further? We await the outcome of the case with interest.

At Turning Point HR, we have many years of experience carrying out equal pay audits, job evaluation exercises, pay benchmarking reviews and advising on market rate allowances. The advice we offer is pragmatic, legislatively compliant, honest, and commercially astute and has proven to be robust when used in legal disputes.

If you have concerns or questions about your organisations pay arrangements, please get in touch now.