Should the finding in the Asda equal pay case apply to separate but arguably sister companies?

Posted in : Seamus Says - Employment Law Discussion on 9 April 2021
Seamus McGranaghan
O'Reilly Stewart Solicitors
Issues covered: Equal Pay; Discrimination and Equality

"With regard to the recent Asda case, if an organisation has retail and other divisions including warehousing but the structure is such that they are separate companies, could the Asda finding apply to employees in this separate, but arguably, sister companies?"

Seamus: Yeah, well just maybe a bit of background about the Asda case to start with. This was a Supreme Court case, so this has moved from an employment tribunal in England through to the EAT, the Employment Appeal Tribunal, up to the Court of Appeal and then through to the Supreme Court. The hearing itself in the Supreme Court was heard on the 13th and the 14th of July 2020, and the decision then itself was issued on the 26th of March. So just in advance of the Easter break, you could start to see some of the details of the case filtering through in the media on social media. The case itself is a case of equal pay, and essentially what you have is that you have retail workers that are working on the shop floor in Asda. So our till operators, our people that are packing out, our supervisors, all those sorts of people on the shop floor brought a case of equal pay against the employer, Asda.

There's different information available, but it looks to be that there's around 35,000 of them in total employed across Asda that have brought these claims. The basis of the retail workers are that they are predominantly female employees, and they have brought a claim of equal pay to say that they are receiving less favourable terms and conditions in respect of their pay. And whenever you bring a claim for equal pay, you have to have a comparator. You have to be able to say who you're comparing yourself to. The crunch issue here was that the retail workers, again, who are predominantly female used the distribution employees . . . I mean, this is the wording of the Supreme Court where they make this distinction between the retail workers and distribution employees in Asda. So all of the employees are working for Asda. They may be working under separate terms and conditions. They may be working under possibly even separate companies. I don't know the answer to that whether they are in the same company, but generally, they are all working for Asda. Asda is overall the employer. And the distribution workers are predominantly male.

So there's where we have . . . obviously, equal pay, it's on the basis of, you know, different genders, sex discrimination and we have the female retail workers making the claim against the comparators of the distribution employees, here the males. And what the allegations are that they're saying the distribution employees are paid a higher hourly rate than the retail employees, and that rate is somewhere along the lines of between 80 pence per hour up to £3 an hour. So there's quite a range of coverage here. The claims were originally brought in the tribunal in England in around 2014. I think the initial hearing was in 2016 and that they were specifically in relation to whether they were being treated differently on the basis of equal pay. So the case initially was dealt with by way of a preliminary hearing point, and that point itself was in relation to whether it was correct and whether the case could proceed on the basis that the distribution employees, the male employees, were appropriate comparators.

And what Asda essentially argued was that they weren't appropriate comparators because they didn't work on the shop floor with the retail employees, that they were based at a separate establishment. So if you think about it in terms of what we know of locally in Northern Ireland, we'll have our large Asda stores or shops and then we'll have the distribution aspects that are located around Belfast and up in Antrim and places like that where you have the distribution staff.

And I think, Scott, whenever we talked previously, you're talking about distribution, maybe about and pickers, you know, they pick the orders, they cage them up and they put them on the lorries and take them out to the stores themselves. And the issue really was whether or not this was an appropriate comparator. The threshold for the equal pay claims is for the claimants. They must be able to compare themselves to a valid comparator, and the tribunal of the first instance essentially said that, yes, they were a suitable comparator, and that was upheld by the EAT. It was upheld by the Court of Appeal, and Asda appealed that point specifically on through to the Supreme Court, and the question for the Supreme Court was whether employees in Asda retail operations were entitled to compare themselves with employees in the distribution centres so they could rely upon the various pieces of legislation and essentially so that they are in the same employment as defined in the 1970 Equal Pay Act. So the Supreme Court have better batted down into this issue.

There are other prior cases that the point is being considered upon, but essentially the Supreme Court came back to say that they were in agreement with all the previous decisions of the Court of Appeal, the EAT, and the tribunal decision. And it is a complex enough case to read through, but essentially it comes down to really . . . the main points in the case as I can see it is that the comparator must be employed by the same or an associated employer. So you might work for Asda. You might have different divisions, different departments within Asda but, in general, provided that Asda is your employer, that would be the first hurdle. The second is that if a claimant chooses a comparator based on another establishment, there must be common terms that apply to both establishments. So we know that the situation here, in this case, is that the retail workers tend to work in the stores, the Asda shops, and the distribution workers are working at a separate place that could be two miles, it could be ten miles, it could be more, away from those workers. And the issue is that there has to be common terms.

And when we say common terms, they don't have to be identical and they do not need to be the same. They just have to be common. The question really was that . . . we have the retail . . . I mean, the distribution locations, they were separate from one another and the question was, "Did common terms apply between the claimants and their comparator establishments satisfying the common terms requirement?" And it was the decision of the initial tribunal followed right through to the Supreme Court that the distribution employees and would have been employed on substantially the same terms if they had been employed at the claimants' site or at the claimants' establishment. So that was the common terms. In aspect, they were saying if they were employed on the same site, they would have been employed essentially on the same terms.

And so that is essentially what the Supreme Court have come back with, and there's an important note in the Supreme Court's case summary as well, but I'll touch on that a little bit later on, but essentially what we have here is a situation that the retail workers are able and allowed to use the distribution workers as their comparator even though they're not based at the same site or at the same establishment. And just as we were mentioning there in the poll, this will have broader implications because it's not just limited to the retail industry. It could be looked at across all industries, whether in the public or the private sector.


This article is correct at 09/04/2021

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Seamus McGranaghan
O'Reilly Stewart Solicitors

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