Court of Appeal rejects Asda’s appeal to stay action on equal pay claims

The equal pay litigation against supermarket retailer, Asda, continues on to the next stage as the Court of Appeal last week rejected Asda’s appeal for an indefinite stay.  Asda, one of the UK’s largest supermarkets, is facing over 7,000 equal pay claims mainly from female employees working in hourly-paid jobs in its stores.

Such claims, if successful, are expected to have a significant impact on employers in the retail sector. Asda, represented by Lord Falconer QC, at the Court of Appeal argued that this case is by far the most important, complex and financially significant equal pay claim ever pursued in the private sector; if successful it will have an enormous effect not only on Asda and all its 150,000 employees, but also on the retail trade generally. Indeed, Lord Falconer QC went so far as to assert that “because the ripple effects of the case will be huge, it is probably the case which will have the single largest effect on the economy of the UK in recent years”. In fairness to Lord Falconer QC, the case was heard before the Brexit vote!

The struggle for equal pay was famously dramatised by the film “Made in Dagenham” about the Ford sewing machinists’ strike of 1968.  Equal pay for equal work is the principle behind the long established legislation.  Equal work can be “like work”, “work rated as equivalent” or “work of equal value”.  Work is of equal value if it is equal in terms of demands made on the employee and their comparator.  Relevant factors to consider might be the effort, knowledge and skill and decision-making required of the role.   40 years on, the legislation seems equally relevant as according to a Parliamentary Briefing Paper (Nov 2015), there is still a 9.4% gender pay gap between male and female employees working full-time. The largest disparity in pay affects men and women aged 40 plus and working full-time.

In the Asda case, the claimants have brought equal pay claims in the Employment Tribunal arguing that they should have been paid the same as Asda’s distribution depot employees. Distribution workers were chosen as a comparator due to the fact that 90% were male and paid a higher wage than the affected female retail store workers.

The claimants countered Asda’s argument at the Court of Appeal as “overblown hyperbole”.  In the event, the Court of Appeal rejected Asda’s argument that the litigation should be brought in the civil courts due to its complexity and significance to the private sector. The cases will continue to be heard in the Employment Tribunal.

Asda is not the only affected supermarket and Sainsburys also faces similar claims. Asda has signalled it will fight the claims vigorously.  This potentially costly equal pay battle comes at a time when the Big Four supermarkets also face market share challenge from newer entrants, such as Aldi and Lidl.

October 2016 is expected to  see the introduction of mandatory gender pay gap reporting for large employers which should go some way to addressing the current imbalance in gender pay. If you would like advice on issues of equal pay affecting your business, please call or email a member of the Employment Team.

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