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Written by Brabners LLP
In the recent case of Asda Stores Ltd v Brierley and other , the Court of Appeal (“CA”) has confirmed that a group of predominantly female retail store employees could compare themselves to a more highly paid group of mainly male distribution depot employees for the purposes of an equal pay claim. This was despite ASDA’s arguments that the employees were not on common terms and despite the fact that they worked at different sites. This article discusses the case and its implications in more detail. It also has some learning points for employers to keep in mind when looking at their own staff.
As you may know, the Equality Act 2010 states that men and women should receive equal pay for equal work. To bring an equal pay claim, a claimant (A) must identify a comparator of the opposite sex (B) performing equal work. Equal work is categorised as one of the following: (i) like work, (ii) work rated as equivalent; and (iii) work of equal value. As part of this, A and B must also work for the same employer or associated employer and must either be working at the same establishment or at a different establishment to which common terms and conditions apply. These terms do not have to be identical, but must be “broadly similar”.
Previous cases have held that common terms may be established even if the employees work in different locations and have never worked in the same workplace! In this scenario, it is for the tribunal to consider whether, hypothetically, the comparator (B) would still have been employed on terms broadly similar to his existing terms, if he was asked to do his job at the Claimant’s (A’s) location. The Court of Appeal had to consider this test further in the context of ASDA’s workforce.
In Asda Stores Ltd v Brierley and another , over 7,000 equal pay claims were brought against Asda Stores Ltd (“Asda”) by retail employees who were mainly women. The Claimants wanted to compare themselves with higher-paid employees in distribution depots who were mainly male. Importantly, none of the depots were located on the same sites as any of the retail stores. Asda relied on this point and tried to argue that the retail staff did not have “common terms” with the distribution employees and as a result, could not use them as comparators.
The tribunal found that the retail employees were entitled to compare themselves to the distribution employees for their equal pay claim. The tribunal confirmed that a single source of terms and conditions existed because the terms were set within the same employer and their respective handbooks had strong similarities. The tribunal commented that any differences between the terms were not extensive enough as to undermine the broad comparison exercise and so the equal pay claims could proceed.
Asda disagreed with this and appealed to the Employment Appeal Tribunal (“EAT”). The EAT upheld the tribunal’s decision and Asda once again appealed to the CA.
Unsurprisingly, the CA dismissed Asda’s appeal. The CA confirmed the test for “common terms” remained that common terms must apply for employees of A’s class and employees of B’s class at the two locations.
Interestingly, the CA found that the tribunal had erred by considering whether there were broadly similar terms between the retail employees at one site and the distribution workers at the other site. This was the wrong exercise. The CA instead held that the issue is whether the terms for the distribution workers were broadly similar across the relevant sites and the terms for the retail workers were broadly similar across the relevant sites. In simpler terms, would a distribution worker be on broadly the same terms regardless of which site he worked at? The CA confirmed that this test was entirely hypothetical.
Despite the tribunal approaching the case in the wrong way, the CA held that it had clearly concluded that common terms were in place for both the retail and distribution workers. This was enough to establish comparability under the Equality Act 2010 and for the claims to continue.
This case reminds us that it is important to make sure that men and women receive equal pay if they are working under common terms. It also confirms that there is no need for claimants to present evidence about the actual terms that they and their comparators are employed, as the test for common terms is entirely hypothetical. As a learning point, employers should look beyond the workplace location when considering equal pay issues and ensuring that there is equal pay for equal work.
This bulletin is for general guidance purposes only and should not be used for any other purpose. Brabners is a Limited Liability Partnership