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Asda and Employees’ Claims for Equal Pay

9th December, 2016

Asda’s Employees Entitled to Compare Themselves with Distribution Depot Employees

Under the Equality Act 2010 (EqA) men and women should receive equal pay for equal work.

The EqA’s predecessor, the Equal Pay Act 1970, section 1(6) provided that, “Men shall be treated as in the same employment with a woman if they are men employed by her employer…. at the same establishment….and at which common terms and conditions of employment are observed either generally or for employees of the relevant classes”. Therefore, a woman needs to be in the same employment as her comparator.

Section 79 of the EqA sets out the permissible comparators. At section 79(4) this includes:

  • B is employed by A’s employer or an associate of A’s employer;
  • B works at an establishment other than the one at which A works; and
  • Common terms apply at the establishments (either generally or as between A and B).

In addition, Article 157 of the Treaty of the Functioning of the European Union (TFEU) allows comparisons to be made between employees in the same establishment or service as another employee. The key question is whether the employees’ terms and conditions are attributable to a single source?

This legislation has been considered in the recent case of Brierley and others v Asda Stores Ltd ET/2406372/2008.

As you know, Asda’s main business is in retail. It is a wholly owned subsidiary of Wal-Mart. It employs 133,000 employees on retail terms. It also has its own distribution operation and employs 11,600 employees on distribution terms. None of the distribution centres are located on the same site as the retail stores. The employment terms in retail and distribution are set by reference to different processes; the processes are implemented and operated by the Executive Board which is subject to governance by Wal-Mart.

The tribunal had to consider whether a group of female, retail employees could compare themselves to a group of male distribution depot employees for the purpose of an equal pay claim.

The Employment Judge held that the employees were entitled to do so. It was held that Article 157 of TFEU was directly effective in these circumstances and that the employees’ terms and conditions were attributable to a single source. The Executive Board of Asda exercised control over distribution and retail. It was also responsible for the differences in pay.

In addition, it was held that there were common terms generally between the claimant employees and their comparators. This included that the terms were set within the same employer which was reflected in strong similarities in their handbooks. The tribunal accepted that there were some differences in terms but held that these differences were not sufficient as to undermine the broad comparison. The judge also rejected Asda’s contention that the change in wording between the Equal Pay Act 1970 and the EqA has effected a change in the law.

It has been reported that the sums in issue could exceed £100m and Asda is now considering its options for appealing this preliminary point.

If you are bringing or need to defend a claim for equal pay or if you are unsure as to whether groups of employees are entitled to equal pay, contact our Employment Department for specialist legal advice.

Ben Mason

Associate

Employment Law
Email: [email protected]
Tel: 01743 294129

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