Equal Pay Comparators: Store Workers can compare themselves to Depot Workers

 

Background

“Men and Women should receive equal pay for equal work of equal value” is the principle of Article 157 of the European Treaty on the Functioning of the EU (TFEU) and this is emphasised in the Equality Act 2010 (EqA).

Despite this it is still widely recognised that there is a continuing gender pay gap and now a group of employees have bought an Equal Pay Claim against Asda which if successful could have a wide impact on employers.

Facts

A group of predominantly female employees (“the claimants”) who work in Asda supermarkets are seeking to bring an equal pay claim against Asda as they are paid less than employees who undertake work in the distribution warehouses (“comparator”), whom are predominantly male.

The claimants have argued that the work in the store is thought to be worth less than the work undertaken by their male colleagues in the distribution centres. On average distribution centre employees are paid £4.00 per hour more than employees working in the store. It is alleged that the difference in pay is due to their gender as working in the store has historically been regarded as “women’s work”.  The claimants are seeking to rely on distribution centre workers as a valid comparison for the equal pay claim under section 79 EqA and section 1(6) Equal Pay Act 1970 (EPA).

After the Court ruled that the tribunal could hear the case, Asda sought a preliminary hearing to strike out the claim on the basis that the comparator group was invalid. The questions put to the employment tribunal were:

  1. Are there common terms and conditions between the claimants and comparator within section 79 EqA and section 1(6) EPA; and
  2. If not, was there a single body responsible for setting pay who could implement equality; and;
  3. If yes, is Article 157 TFEU directly enforceable in UK law?

Decision

The employment tribunal found the following:

  1. The terms of employment of the claimants and the comparator were broadly similar as they were both paid hourly and there was a strong correlation between the handbooks. It did not matter for the purposes of section 79 EqA and section 1(6) EPA that there were small differences as these were not significant enough;
  2. The tribunal rejected Asda’s argument that there were two separate bodies who determined pay for store workers and pay for distribution workers but that the executive board was ultimately responsible for determining pay and had the ability to introduce equality of pay; and
  3. Article 157 TFEU was directly enforceable where UK legislation did not have the effect intended by the article.

Therefore the claimants are now able to proceed with their equal pay claim, subject to the result of any appeal bought by Asda.

Comments

Although many are seeing this as a victory for the claimants, this was only a hearing to determine a preliminary issue.

Perhaps all this decision has done is clarify the implementation of both the EU law and UK law in relation to equality and has clarified the interpretation that will be given to both the terms “single source” and “similar terms and conditions”.

The first test case in the equal pay claim is expected next year where the tribunal will be asked to determine:

  • Whether the work of the claimants and the comparators is of equal value; and
  • Whether the differences in pay are because of a material factor which is not the difference in gender within section 1(3) PA and section 69 EqA or whether the different is because of their gender.

It has been reported in the press that if the claimants are successful Asda could be facing damages in the region of £100m.This is not surprising as there are approximately 7000 workers that have issued equal pay claims.  It is unclear whether Asda will appeal this decision but given the value of these claims this would seem likely.  Other retailers that employ staff in distribution centres are also likely to be watching this case very closely.

For further information on any of the above and the impact on you please contact the Devonshires Employment Team.

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