Equal pay claims: Retail employees can compare themselves to distribution employees

The Supreme Court has ruled that Asda’s retail employees working in shops can compare themselves with distribution employees working in distribution depots for the purposes of an equal pay claim. 

Terms for retail and distribution staff

Asda employs around 133,000 staff in their stores on retail terms. As the retail workforce is not heavily unionised, their terms are not negotiated collectively. Asda also employs approximately 11,600 employees across 24 distribution centres. They are employed on distribution terms, collectively bargained through the GMB, following national recognition agreements. None of the retail stores and distribution centres are located at the same sites.

Retail staff bring equal pay claims

Over 7,000, predominantly female, retail employees brought equal pay claims in the employment tribunal, seeking to compare themselves with the higher-paid, and predominantly male, distribution employees. They argued that their work is of equal value to that of the male distribution employees and that there is no material factor justifying the difference in pay. 

Under the Equality Act 2010, where a claimant and their proposed comparator are not employed at the same establishment, they need to show that common terms apply at the establishments in question. Asda argued, as a preliminary point, that the retail employees could not compare themselves with the distribution employees as common terms did not apply. The employment tribunal rejected Asda’s argument and Asda appealed unsuccessfully to the Employment Appeal Tribunal and the Court of Appeal.

Supreme Court rules common terms apply

The Supreme Court dismissed Asda’s appeal. Having reviewed earlier case law on whether common terms apply at establishments, it noted that the test is ‘if the comparator was employed to do his job at the claimant’s establishment, would their existing terms and conditions apply? In other words, if the distribution staff did their distribution job from the retail stores, would they remain on their existing terms? The terms would need to be broadly similar, not identical. It did not matter that the distribution employees could not do their job from the retail establishments.  

The employment tribunal had concluded that the distribution employees would have been employed on broadly the same terms if they had been employed at the claimants’ site. This meant common terms applied and the retail employees could therefore compare themselves with the distribution employees.

What does this mean?

This is just one hurdle successfully navigated by the retail employees in their equal pay claim. It does not mean that they have won their claim. They will now need to demonstrate that their work is of equal value to that of distribution staff. If they can do that, Asda, in turn, will then have the opportunity to argue that the difference in pay is due to a material factor which is not the difference in sex.    

The case clarifies the test for ‘common terms’ where claimants and comparators work at different establishments. The Supreme Court indicated that this is a threshold test, designed to ‘weed out’ comparators who cannot be used because the differences in terms are based on geographical factors. It emphasised that cases where this threshold test cannot be met are likely to be exceptional, meaning it will be difficult for employers to defeat claims on this basis.  

Asda Stores Ltd v Brierley