Talking Employment Law: Asda workers a step closer to a £1.2 billion equal pay claim

Asda workers fighting for equal pay have advanced to the final stage in their legal battle, as the employment tribunal ruled that the majority of claimants working in retail roles in Asda supermarkets were doing work of equal value to their counterparts working in distribution centres.

In the latest podcast of the ‘Talking Employment Law’ series, Louise Keenan and Shauna Jones, members of the employment team at Clarkslegal, will discuss the recent Asda equal pay decision, which has been attracting a lot of attention. 

In the podcast, they will cover the following topics:

• An overview of equal pay law
• Details of the Asda case
• A look at other important equal pay claims within the retail sector

If you would like advice on your payment practices to ensure compliance with Equal Pay legislation, please feel free to contact our employment law team who can review and assist you in meeting your legal obligations.

Transcript

Louise Keenan 00:05

Hello and welcome to the latest podcast in our Talking Employment Law series.

My name is Louise Keenan.  I’m an Associate in the employment law team at Clarkslegal and I am joined by my colleague Shauna Jones who is a trainee solicitor  also in the employment law team. 

In this podcast, we are going to look at the recent Asda equal pay decision which has been attracting a lot of attention.  

Shauna Jones 00:30 

Yes, let’s start by giving a quick overview of equal pay law and I mean quick because it is a complicated area with intricate tests so not the type of thing we can cover in a short podcast

The Equality Act 2010 requires men and women to receive equal pay for equal work and the law will achieve this by implying a ‘sex equality clause’ into the employee’s contract replacing any less favourable term with the more favourable one.  

Now, claims for equal pay involve quite a few tests but there are essentially three key stages.

Firstly, the employee must be able to identify an appropriate comparator.  This comparator must be 

• an actual comparator (as opposed to a hypothetical one)
• a person of the opposite sex
• a current or previous employee
• and they must work (or have worked) at either the same establishment, a different establishment but with common terms, or they must have been employed by a single body responsible for setting or continuing their terms of employment.

Secondly, the employee must show that the work they are undertaking is ‘equal work’.  To amount to equal work the work must fall within one of three categories.  These are that the work is:

• ‘Like work’ which is essentially work that is the same or broadly similar;
• ‘Work rated as equivalent’ which involves the carrying out of a job evaluation study or scheme; or
• ‘Work of equal value’ which means it does not fall into the above two categories but is nonetheless equal in terms of the demands made on the employee and the comparator by reference to factors such as effort, skill and decision making.  

Finally, the employer will need to show that the difference in pay is due to a material factor which is not directly or indirectly discriminatory on the grounds of sex to successfully defend the claims.    

Louise Keenan 02:27

Thanks for that Shauna, so let’s take a look now then at what has happened in the Asda case.  

The equal pay claims against Asda have been brought by staff working on the shop floor (such as check out operators and shop floor assistants) and they are predominantly female.  

They have been paid a lower hourly pay rate than staff working in the distribution centres who are predominantly male.

Now these claims commenced back in 2014 and so they’ve already been going for quite some time and the claimants have already successfully argued that their roles could be compared with warehouse roles for equal pay purposes.  This was a decision that Asda actually appealed all the way to the Supreme Court but the Supreme Court, upheld the decisions of the lower courts and found that common terms of employment applied between the two groups.   

So, this most recent case was about the second stage we talked about i.e. whether the two groups were doing equal work. 

The Employment Tribunal compared 14 of the retail roles with 17 roles in the distribution centres.  It found that 12 of these roles constituted work of ‘equal value’. 

Two of the roles –  which were the personal shoppers and shop-floor assistants for edible groceries -  were not considered to be work of ‘equal value’ so these claims, at this stage, will not progress, though that’s subject to any appeal. These two roles are understood to make up around 11,000 of the 60,000 claimants.   

There is a risk that Asda will appeal the decision regarding the other roles.  However, assuming the decision remains the same, the case will progress now to the final stage where the Employment Tribunal will consider whether the pay differential was due to a material factor which was not directly or indirectly discriminatory on the grounds of sex – so the material factor defence as it is known.  

Shauna Jones 04:36

Yes, and this case is getting a lot of attention isn’t it because it is clearly significant for the retail sector and can be extremely costly – It’s reported for example that Asda is looking at a £1.2 billion claim for back pay if this succeeds and we already know from last year’s judgement against Next, that Next had to pay out around £30 million in their equal pay claim.

Louise Keenan 05:01 

Yes, that’s right.  Next lost a significant equal pay claim didn’t they in August 2024.  Again, they were looking at store workers (who were predominantly women) comparing themselves to warehouse workers (who were predominantly men) and when it came to the material factor defence, so the next stage for Asda, Next tried to argue that the pay differential they had was due to market forces but that was unsuccessful hence the hefty bill you mentioned.  

Shauna Jones 5:33

Yes, and we’ve also got equal pay claims against supermarkets like Morrisons, comparing the same groups, and claimants in that case have recently made significant advancements.  So there certainly appears to be a growing trend here. 

Louise Keenan 5:47

Yeah there certainly does and these are cases that supermarkets and others in the retail sector in particular, are going to be watching quite nervously, I think.  

And that brings us to the end of our podcast.  I guess all that’s left to say here really is that the ultimate decision on Asda has not yet been made, we do still have this final stage and so we will keep you updated via our podcasts and articles on our Clarkslegal and Employment Buddy websites as this case develops.

Shauna Jones 06:19

We hope you have found this podcast helpful and thank you all so much for listening.