In the latest judgement to be issued amongst the increasing wave of UK equal pay litigation in the retail sector, a Tribunal has ruled that the jobs of several women working within female-heavy retail roles at Asda supermarkets, including check out operators and shop floor assistants, are of equal value to at least some of the higher paid distribution centre roles at the supermarket’s warehouses, predominantly occupied by men.
Comparable notable cases are currently also in progress against Next, Tesco, Morrisons, Sainsbury’s and the Co-op as awareness and employee activism concerning equal pay legislation, in particular in respect of equal pay for work of equal value, continues to grow.
In this article, we take a look at the case of Brierley & Others v Asda Stores Ltd and insights it gives employers.
Background
The Equality Act 2010 sets out the principle that men and women should receive equal pay for equal work. There are three categories of equal work:
- Like work – for example, if two jobs involve work that is the same or broadly similar and any differences that exist are not of practical importance in relation to the terms of their work.
- Work rated as equivalent – where the employer has implemented a job evaluation study (a JES) and it gives the jobs an equivalent rating (or would have done so had the JES not been made on a sex-specific system).
- Work of equal value – which is not like work or work rated as equivalent but which is equal in terms of the demands made by reference to factors such as effort, skill and decision-making.
It is this last category of work of equal value that is the focus of this article.
Case summary
A brief summary of the history of this long-running case, which first commenced in 2014, is set out below:
- 14 female lead claimants, working in retail roles at Asda, including checkout operators and shop floor assistants, brought equal pay claims against the retailer on behalf of 60,000 workers in relation to the higher rate of pay afforded to the overwhelmingly male staff population working in the company’s warehouses and distribution centres.
- Following a prolonged dispute culminating in the Supreme Court in 2021, it was confirmed that the women could use the warehouse workers as comparators for the purpose of equal pay legislation despite the fact that they did not work at the same establishment (being located at distribution depots rather than in the retail stores themselves). The court confirmed that the correct test to apply was whether the warehouse workers would have been employed on broadly similar terms to those which they had at their own establishment if they were employed on the same site as the claimants.
At the final equal value hearing stage, the Tribunal has found in the claimants’ favour (bar two claimants – a personal-shopper and shop floor assistant for edible groceries, whose roles were deemed not to be of equal value to the warehouse comparators), using a complex matrix of factors including assessment of the required knowledge, mental and physical demands, responsibility and working conditions of each of the roles.
The concept of ‘work of equal value’ has increasingly seen courts find in favour of claimant workers even where the roles being compared seem on the face of it very different. This recent prevalence of equal value cases has to date largely been within retail or public sectors, such as looking at comparisons between customer facing retail roles and more labour-intensive warehouse roles. However, it is conceivable that, as employee awareness regarding equal pay rights increases, such claims could start arising in other sectors.
It is now for Asda to demonstrate that the discrepancy in pay is unrelated to sex and is instead the result of another permissible ‘material factor’. As a recent judgement in the comparable Next case has evidenced, successfully putting forward a material factor defence is not easy. Employers must demonstrate that the material factor relied on is the real reason for the difference in pay, that it is significant, and that it is not related (or essentially tainted by sex). Previously argued material factors, include historical reasons, market forces, skills shortages and performance-related pay. However, each case will hinge heavily on its own unique facts and factors that have succeeded in some claims have failed in others. It also remains to be seen whether Asda will appeal the Tribunal judgement on equal value.
Some reports are currently speculating that if unsuccessful, Asda could face significant payouts up to £1.2billion.
Key Takeaways
Needless to say, equal pay, particularly when looking at whether work is of “equal value”, is a highly current and topical area. This case also gives some important lessons for employers and has been long running for over ten years, with many appeals and lengthy hearings along the way – and so defending equal pay claims can be both costly and lengthy. The potential financial and reputational risks are also often significant.
There are also other developments in this space with which employers should keep a close eye, for example the Government has promised in its Plan to Make Work Pay to extend the ability to bring equal pay claims to ethnicity and disability and by ensuring that the outsourcing of services can “no longer be used by employers to avoid paying equal pay.” A Call for Evidence is anticipated on this in the coming months (see our Reform Hub for more information).
In addition, the EU Pay Transparency Directive is likely to drive further change. Although post-Brexit, Great Britain is not legally required to implement this Directive, employers in multi-national groups with large European operations may find themselves under internal pressure and scrutiny in the UK in the interests of maintaining a consistent approach to pay reporting within their organisation. In brief, the Directive introduces a host of new obligations, including broad pay reporting requirements, which will intersect with all aspects of an employer’s recruitment and people processes, including remuneration, pay structures, and job frameworks. As part of this, employers will be required to proactively make equal value assessments across different categories of workers for the purposes of reporting gender pay gaps. For more detail, see here.
Given this backdrop, employers across all sectors may wish to start reviewing their job architecture and gender composition across roles to assess where there might be potential legal risk relating to equal value comparisons. This is a tricky process to navigate, and particular care and consideration should be given to the applicability of legal privilege and what internal documents may later become disclosable in litigation. If you would like any advice on this issue, or pay reporting obligations more generally, please get in touch with your usual Littler contact.
