Asda’s equal pay tribunal ruling
Today’s Tribunal ruling in the long running ASDA equal pay litigation could give rise to a £1.2 billion pay out and a significant increase in these types of claims in the private sector.
The lowdown on Equal Pay Claims
The Equality Act 2010 states that men and women in the same employment performing equal work must receive equal pay, unless a difference in pay can be “justified”. There is no minimum service requirement to acquire this right.
Equal pay applies to all contractual terms, not just basic pay, and can include things like non-discretionary bonuses, and benefits.
It does not matter how long they have been employed or whether they have a full time, part time, fixed term, zero hours or casual contract.
There are three kinds of equal work:
like work is the same or broadly similar. It involves similar tasks which require similar knowledge and skills, and any differences in the work are not of practical importance.
work rated as equivalent has been rated under a valid job evaluation scheme as being of equal value in terms of how demanding it is.
work of equal value is not similar and has not been rated as equivalent but is of equal value in terms of demands such as effort, skill and decision-making.
If a woman proves that she is doing equal work to a man, there is a legal presumption that any difference in their pay is because of their sex, unless the employer can show that a ‘material factor’ explains the difference.
A material factor must:
be a genuine reason for the difference in pay
cause the difference in pay
be significant and relevant
explain the pay difference with ‘particularity’ - this means the employer must be able to show how each factor was assessed and how it applied in the woman’s specific case
not be tainted by direct or indirect sex discrimination
What did the Tribunal decide?
The ASDA claim was brought back in 2014 by 60,000 staff. It concerns predominantly female staff on the shop floor raising the complaint that they are paid substantially less than their male comparators in distribution centres. Today’s ruling confirms that 12 of the 14 ‘lead claimants’ undertake work of ‘equal value’ to their male comparators. Unless ASDA can demonstrate that the difference in pay was for a justifiable non-discriminatory reason, this will give rise to significant back pay awards across many of the claimants involved in this litigation. If successful at this final stage, it would be the largest private sector equal pay claim to date.
Why is the finding important?
This litigation is a good example of the expansive nature of equal pay claims. Not only have the claimants in this case succeeded in comparing themselves to male workers who are not doing the same job as them; they are also comparing themselves to workers in different establishments within ASDA. Further the claimants are entitled to compare terms with what a hypothetical comparator would have been paid if they had worked at the same location as them.
What steps should employers be taking?
Given the size of the possible pay out in this case and how widely it is being reported, it is likely that similar claims will follow both in the high street and across a number of different industries. Only in August of last year Next shop workers won a six year equal pay battle.
Annual pay gap reporting requirements for larger employers may act as a basis for bringing these sorts of claims. Getting out ahead of this trend is therefore crucial.
All employers with large numbers of staff, particularly across lots of different sites, should be reviewing their pay practices. Where differences in pay between men and women both within single sites and across multiple sites are identified, employers should consider whether the difference is justified and if not, take action to remedy the position.