As we have previously blogged, Asda is facing equal pay claims from over 7,000 shop floor workers. The Employment Appeal Tribunal ruled last week that the latest attempt to stop the claims from proceeding has been unsuccessful.

The tribunal decision

In October 2016, the employment tribunal ruled that workers in Asda's retail stores (who are predominantly female) could compare themselves with higher paid men working in distribution centres. Asda had argued that because separate departments ran the shops and the distribution centres, with different methods of calculating pay, it was not appropriate to make a comparison between the two sets of workers. This was rejected because it was found that both sets of workers were employed by Asda with pay ultimately controlled by a single source, the executive board.

The EAT decision

Asda appealed to the EAT on ten grounds, all of which were unsuccessful. In particular the EAT held that where there is a single source of pay and conditions for the claimant and the comparator, a direct comparison is permitted. Although here pay was set separately for the two groups of workers, Asda's executive board had the overall power to restore equality of pay. This was enough to constitute a 'single source of pay and conditions'.

What next?

It has been reported that in its decision the EAT encouraged Asda to take steps to solve its equal pay issues. However, it also allowed permission to appeal and Asda has already indicated an intention to take the case to the Court of Appeal. The saga is, therefore, set to continue for some time.

If the case does eventually proceed, the tribunal will look at whether, in fact, the distribution centre and shop floor workers do like work or work of equal value. If they do, Asda has indicated that it will argue that any pay differentials are justified by the existence of different market rates in different industry sectors.

Other employers in the private sector dealing with equal pay issues (particularly Sainsbury's which is also facing claims) will be watching developments with interest.

Gender pay gap reporting

This all brings the gender pay gap back into focus once again. Read our earlier blog for a reminder of the obligations on larger employers to publish annual gender pay gap reports. If gender pay gap reporting highlights any disparities between male and female workers, please get in touch with your usual Brodies' contact to talk through your options.


Julie Keir

Practice Development Lawyer