Asda loses equal pay case - the lessons for employers

Croner Pay and Reward Manager, Clare Parkinson comments on an employment tribunal decision which will send alarm bells ringing through the retail industry.

Following a three-day hearing which took place in October 2018, a long awaited Court of Appeal decision has confirmed that predominantly female retail workers in ASDA stores are legally able to compare their roles to predominantly male workers in the company’s depots. Dismissing an appeal by ASDA against earlier tribunal decisions, this ruling seems to have extended how far an equal pay claim can be applied.

Although the Equality Act 2010 places an obligation on employers to pay all male and female employees doing the same job equally, it can also allow for a comparison to be made between jobs with broadly similar demands and experience required. This means that if a female worker can demonstrate her role is broadly similar to a male colleague’s but he is getting paid more than her, this action may amount to sex discrimination on the part of the employer. This latest development in the long running ASDA equal pay case has now outlined that job roles can still be considered comparable even in situations where the employees operate in different market sectors and pay is distributed through differing market rates.

As ASDA will not be able to appeal this decision to the Supreme Court, the claimants will now be able to proceed with their substantive claim. Going forward, they will have to demonstrate that their roles are of equal value and, if this is the case, the burden will be on ASDA to outline that there is a reason other than sex discrimination which means the roles should not be paid equally. If successful, the company could be liable for substantial payments of back pay, covering hundreds of workers over a six-year period.

Employers should bear in mind that this issue does remain generally unexplored within the private sector and there is therefore an expectation that, with the introduction of gender pay gap reporting, the number of equal pay claims are likely to increase.

This judgement reminds employers that they may be accused of facilitating unequal pay without intending to do so. Although this case is far from over, and it is possible that future courts will find against the claimants, it has already given rise to a number of similar accusations being made against other large retailers including Tesco, Sainsbury’s and Morrison’s.