The Equality Act 2010 implements the principle that men and women should receive equal pay for equal work.
Whilst in today’s society we would expect men and women’s salaries to be harmonised, in reality there appears to remain a stark contrast, particularly in the retail sector, which is the focus of a number of group litigation claims.
In 2016, 35,000 Claimant’s, predominantly female retail employees (who work in store) brought a claim against ASDA for equal pay. The Claimant’s sought to compare themselves to the higher paid, predominantly male distribution workers (who work in the distribution depo’s).
To be successful in their claims, the Claimant’s will need to establish:
- That the jobs are comparable;
- If the jobs are comparable, that they are of equal value in terms of skill and training;
- If the jobs are of equal value, that gender is the main reason that there is a difference in pay.
This judgment focused on question 1 only i.e. whether the two job roles are comparable, if so the Claimant’s claims could get off the starting blocks.
The difficulties faced by the Claimants in this case is that, because they did not work at the same establishment they could only rely on the distribution workers as a comparator if ‘common terms’ apply to both sets of workers. Here, the retail workers were employed on retail terms and the distribution workers were employed on distribution terms, each are set by a different management process. Therefore, ASDA argued that the job roles could not be compared and that there were genuine geographical or historical reasons why they had different pay regimes at the different establishments.
Previous case law suggests that common terms can be established even where the two sets of employees have not and never would work in the same workplace. In these situations, the Tribunal can consider, hypothetically whether the comparator would be employed on broadly similar terms, if asked to carry out his role at the Claimant’s location.
In the first instance, the Employment Tribunal held, in relation to the first question that the job roles of retail workers and distribution workers were comparable taking into consideration the previous case law and evidence before it. This decision was appealed by ASDA to the EAT and Court of Appeal who both agreed with the Employment Tribunals initial decision.
In a final attempt to discharge themselves of any potential liability, ASDA appealed to the Supreme Court, who unfortunately for ASDA came to the same conclusion as the lower courts.
In reaching their decision, the Supreme Court gave guidance to Tribunals that the true focus of the equal pay legislation was to protect employees from pay disparities and be a resolution for those entitled to equal pay. The ‘common terms’ question should be considered as a threshold test but should not be used as a major hurdle in Equal Pay claims as there are enough of these hurdles already contained within the legislation.
Ultimately, the Supreme Court’s decision has not changed the law and the judgment in favour of the Claimant’s is just one small victory in what will be a lengthy litigation process.
However, the judgment brings a warning to large employers who may want to consider undertaking the following:
- a review of their pay structures to make sure that there is equality of pay in a broader sense;
- if there is a genuine rationale for disparity in pay at different establishments this should be clearly defined in the employee’s terms and conditions;
- terms and conditions should include details of how a change in location may impact their pay.
The above steps may help to protect employers from group actions being brought by their employees where they believe they are being paid less for comparative roles.