The landmark ruling passed down by the Supreme Court on 26 March 2021 established that the terms and conditions of Asda’s in-store staff could be compared to its warehouse staff for the purposes of an equal pay claim, even if the two groups of workers are not based at the same establishment. This is a significant finding which carries widespread implications for not only Asda but also the retail sector.
So how did we get here and what does this mean for Asda and the industry in general?
What is the Asda case?
Asda employs workers in-stores who are shop floor staff and workers who work in its distribution centre, who are warehouse workers. In-store staff are mainly female whereas those working in its warehouse are predominantly male. Workers in the warehouse get paid approximately £1.50 – £3.00 an hour more than workers working in-store. This is a relevant factor in this case as it lends itself to an equal pay claim, and begs the question whether the employer is potentially discriminating against its workers based on their gender
In 2016, thousands of in-store staff brought an equal pay claim against Asda, arguing that the work done by them was of equal value to that done by the warehouse staff and as such, they should receive equal pay.
The Equality Act 2010
The Equality Act 2010 states that men and women who do equal work whilst working for the same employer must get paid the same. Accordingly, someone should not get paid less just because they are of a different gender. The claimant bringing the claim must show to the employment tribunal that they are receiving less pay than her/his comparator doing equal work. The employer must then prove to the tribunal that the difference in pay is due to a material factor which has nothing to do with gender.
Under the equal pay legislation, it is recognised that some employers might operate from different establishments which carry different terms and conditions for the workers working at those establishments. Employees working from the employer’s different establishment will only be in the same employment if ‘common terms’ of employment apply to them all. So the main question here to ask was – if a worker from the warehouse were to be sent to work in-store, would their terms and conditions of employment generally be the same?
Asda argued that the work in both locations was different and therefore the roles are not comparable.
The case was brought before the Employment Tribunal where the claimants’ won. Asda appealed to the Employment Appeal Tribunal and then the Court of Appeal and lost both appeals as it was held that Asda’s in-store staff could compare themselves to its warehouse workers.
The Supreme Court Ruling
The case was subsequently brought before the Supreme Court in March 2021 and the question posed was whether the ‘common terms’ requirement under the equal pay legislation was satisfied.
The Supreme Court upheld the Employment Tribunal’s decision and decided the work Asda workers did in the supermarkets was comparable to the work being done in the distribution centres.
The Court stated that the 35,000+ claimants who brought the claim against Asda now had to prove their work was the same as the work done by the warehouse workers. Asda, on the other hand, will inevitably argue that there is a difference between the two roles in order to prove in-store workers are not entitled to equal pay.
What does this mean for Asda?
However significant this ruling is, it is critical to remind ourselves that this judgment does not establish that in-store staff is entitled to equal pay. It merely confirms that in-store staff can compare themselves to those working in the distribution centres for the purposes of assessing equal pay. In-store staff therefore still have their work cut out for them despite this landmark ruling.
Notwithstanding the above, this ruling will undoubtedly encourage all in-store staff at Asda, across the nation, to pursue their equal pay claims.
Further to the ruling, Asda has maintained its position by saying those working in-store have a different job role and that “retail and distribution are very different sectors with their own distinct skill set and pay rates”.
If the Courts ultimately rule that in-store staff is entitled to equal pay, this will cost Asda millions of pounds worth of back pay and benefits therefore Asda stands to lose financially in not only legal costs, but also damages.
Asda’s next steps remain to be seen.
What does this mean for the retail industry?
Not only does this have ramifications for Asda workers, but also for the retail industry as a whole. The manner in which Asda operates, basing different employees in different locations, is a very common business model retailers use.
Several retailers, such as Sainsbury’s and Next, have long been battling such equal pay claims where their in-store staff argue they are entitled to the same pay as the warehouse workers. Retailers would have undoubtedly kept a close eye on the Supreme Court ruling in this case which will only serve to make them more anxious. It remains to be seen how they will now decide to deal with the existing equal pay claims they have and any future claims which commence against them.
Across other industries, this ruling will make women assess their legal position if they are predominantly working in a particular location, and being paid considerably less, compared to their male counterparts working in a different location of the company. They will be considering whether they are also comparable to their male counterparts and therefore could potentially bring an equal pay claim.
If you believe that you have been discriminated at your workplace and would like legal advice from one of our employment experts on discrimination, please call 0808 252 5231 or request a call back online.