The Equality Act 2010 implements the principle that men and women should receive equal pay for equal work. Broadly speaking, equal pay claims can be brought on three grounds:
The jobs are considered “like work” i.e. they are the same or broadly similar in terms of the skill or knowledge needed
The jobs have been “rated as equivalent” based on a job evaluation scheme
The jobs are of “equal value” in terms of the demands made on the employees
The law currently incorporates a sex equality clause into all contracts of employment which prohibits pay discrimination based on sex. This means that a woman bringing an equal pay claim must compare her contractual terms with those of a comparable man. This has been the key focus of the Asda case to date.
Over 7,000 equal pay claims were brought against Asda stores by retail employees, predominantly women. They sought to compare themselves with higher-paid employees in distribution depots, who are predominantly male, arguing that this is work of equal value. The tribunal’s decision, upheld by the Employment Appeal Tribunal, was that there was a single source of terms and conditions and this was sufficient for a comparison.
Asda appealed this decision which was heard by the Court of Appeal in a three-day hearing in October 2018. On 31 January 2019 the Court of Appeal upheld the previous rulings stating that, in the vast majority of cases, the law allows an employee to compare themselves with any employee of the same employer.
Whilst this is an important ruling, the judgment concerns the first part of the process in an Equal Pay case. The next stage will ask whether the roles are of equal value and if they are whether there is a reason, other than sex discrimination, that means the roles should not be paid equally.
Other equal pay claims have been made by staff at Sainsbury’s, Tesco and Morrisons and the total estimate of the claims against all four supermarkets if they lose could be over £8 billion, according to their legal representatives. This decision could have huge potential implications for all retailers who have their own distribution centres.
The decision means that employers will need to start seriously analysing what may be considered work of equal value across their entire business. You can discuss the impact of this ruling on your Organisation with your dedicated Employment Solicitor.