Tabytha Cunningham | 26th March 2021

Equal pay : Asda loses first significant step in an equal pay case


Tabytha Cunningham | 26th March 2021

Equal pay : Asda loses first significant step in an equal pay case

Asda lost the first significant step in its fight against equal pay cases bought by over 35,000 employees in a judgment announced earlier today.

The equal pay dispute

Having been defeated in the lower courts on its initial arguments, Asda had appealed to the Supreme Court. The Supreme Court ruled on 26 March 2021 that Asda’s shop floor staff can compare themselves to distribution staff at their warehouses for the purpose of their equal pay claim. These claims will therefore now proceed to the next stage

Although Asda staff will have to overcome further hurdles to ultimately succeed in their equal pay claims, this is an important judgment in this large equal pay case, which if successful will result in significant back payments to employees. In total when the claim was first brought Asda employed approximately 133,000 hourly paid retail employees. The difference in pay claimed in some cases is was up to £3 per hour.

This decision has been made in one of several long running pay disputes against large retailers. Shop floor workers, who statistically tend to be women, are claiming that their work is of equal value to work carried out by warehouse staff, who statistically tend to be male. They are claiming equal pay with warehouse staff on this basis.

Asda argued that the two roles could not be compared to each other as they are in different departments, and the warehouse roles were more difficult and are on different terms. The Supreme Court today agreed with the employees that they could be compared with warehouse staff.

In order to succeed, the employees will now need to demonstrate to the Employment Tribunal that, comparing themselves to the warehouse staff, their work is in fact of equal value. Asda will still have the opportunity to defend the claim if they can show that the difference in pay is due to a material factor which is not of itself discriminatory. A further hearing will be arranged to decide these points.

The outcome of today’s decision has implications for the other ongoing claims in the retail sector, which represent millions of pounds in potential back pay. The decision today is likely to speed up the final outcomes in these cases, meaning they may proceed straight to a final hearing. It is also a reminder for employers in other sectors that equal pay claims can be brought based on comparisons with other roles.

Equal pay is still a significant issue and is costly to get wrong, both in terms of legal claims and the negative publicity which today’s announcement demonstrates can be significant. Employers should review their pay rates across the organisation to ensure that they are complying with equal pay obligations, particularly where they have areas or roles predominantly staffed by women and others predominantly staffed by men as in this case.

If you have any queries on this subject please contact a member of the Employment team.