The Supreme Court has delivered its decision in the Asda equal pay litigation and, as many expected, it has upheld the decisions of the previous courts. As such, Asda’s female retail store employees can now proceed with their claim by comparing themselves to the higher paid male distribution depot employees.  The female employees are claiming that their work is of equal value to that of the male distribution employees, and seek compensation for the difference in pay dating back six years from the date on which they brought the claim.

The preliminary issue arose in the Asda case because the retail store employees are not employed at the same site as the distribution depot staff.  Where that is the case, equal pay law requires the comparator group to be employed on “common terms” to the terms applicable to them in the site where the claimants are based, i.e. terms that are broadly the same.  Here, there were no distribution employees based at the retail stores, and so the court had to consider the hypothetical question of what terms the distribution staff would have been employed on if they had been based at the stores.

The Supreme Court clarified various key points:

  • The question was whether the distribution staff would have been employed on common terms to their current terms, if they were based at a retail store.
  • The common terms requirement was simply to filter out comparators who could not be used because the differences between them and the claimants were based on geographical, and possibly also historical, factors. Those cases would be exceptional.

The Supreme Court said that there was no need to consider whether the retail employees and depot employees could actually work alongside one another (e.g. in a supermarket), but that one had to imagine that the depot workers could carry out their roles at a location at the claimants’ establishment – e.g. at a distribution depot adjacent to a supermarket – before asking whether the distribution employees would, in such an imagined scenario, continue to be employed on the same, or substantially the same, terms as they were employed at their own establishment.  The court also said that this “threshold test” regarding common terms should be kept within tight bounds and should not lead to a prolonged enquiry by the employment tribunals – a line-by-line comparison of terms and conditions is not required.

It should be noted that this is not the final decision in this case, however, as the claimants still need to show that the work they perform is of equal value to the distribution employees, and Asda may be able to show that there was a ‘genuine material factor’ justifying the difference in pay, which would provide a defence to the claim.  The judgment does, however, clarify the law regarding comparisons between employees at different sites, and that the threshold test for comparing terms should not be a major hurdle for claimants.  As a result, we may see further similar claims in which claimants choose comparators who are based at different sites.

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