Asda Employees Leap First Hurdle

Asda’s employees in retail operations finally won the right to compare themselves for equal pay purposes with employees working in the employers’ distribution operations, although this was but the first step in their struggle: Asda Stores Ltd (Appellant) v Brierley and others (Respondents) [2021] UKSC 10,  Lord Reed, Lord Hodge, Lord Lloyd-Jones, Lady Arden, Lord Leggatt

The Supreme Court in its unanimous judgment handed down today dismissed the employers’ appeal against the Court of Appeal which had dismissed its appeals from the Employment Appeals Tribunal after the Employment Tribunal had ruled in favour of the employees on a preliminary issue and allowed the claim to proceed on this basis.

This was the first case involving a cross-establishment comparison where the claimants’ and comparator group’s terms were not fixed on both sides by collective bargaining agreements.

In Dumfries and Galloway Council v North [2013] ICR 993 the Supreme Court said that the purely hypothetical exercise to be undertaken to determine whether the terms were common was to ask whether, assuming that the comparator was employed to do his present job in the claimants’ establishment, the existing terms and conditions would apply.

The correct exercise was to make a broad comparison by asking whether the terms enjoyed by the distribution employees were substantially the same at the distribution depots and at claimants’ establishments.

The employment tribunal was wrong to perform a line-by-line comparison of the specific terms and conditions of employment of the distribution employees versus the retail employees.  In any event, the claimants succeeded on the North hypothetical.

Giving guidance for future case management by employment tribunals, Lady Arden said that even when evidence was led and the employment tribunal must make factual findings on the issue of whether the comparators would be employed on the same or substantially the same terms at the claimants’ establishment as at their own establishment, the fact finding exercise could and should be kept within tight bounds.

The employment tribunal should not countenance a prolonged enquiry into this threshold test.

The employer would have ample opportunity to show that pay and disparities were justified when the value of the claimants’ work was evaluated or if it raised a defence of genuine material factor under section 1(3) EPA 1970 or section 69 EA 2010.

For the same reason, appeals were to be discouraged.

The answer, as in this case, may be more readily found by inference from the relevant facts and circumstances rather than from the opinions on hypothetical facts of individuals employed in the business.

Employment tribunals were not required by the common terms requirement to perform any form of line-by-line comparison of different sets of terms and conditions.

In the present case, the tribunal became entangled in a document-intensive line-by-line comparison between the terms and conditions of the claimants and those of the distribution employees.

The aim of the equal pay legislation was to remove pay disparities that were endemic in some pay awards and which did not properly reflect the value of the work for which they were paid.

This was the wrong comparison in any event, but it was helpful to contrast it with the North hypothetical when the ultimate issue was simply whether the terms would be the same or substantially the same as those of the comparators in their own establishment.

If, in the absence of firm case management, the threshold test was elevated into a major hurdle mirroring other elements of an equal pay claim, the purpose of equal pay legislation would be thwarted, and the pay disparities would not be investigated.

That outcome would be contrary to the object of the equal pay legislation as recognised by Lord Slynn in British Coal Corpn v Smith [1996] ICR 515, which was to allow comparisons between employees who did not and never could work in the same workplace.

Furthermore, as Lady  Hale explained in North at para 35, the common terms requirement was not to be used as a proxy for other elements in equal pay claims, such as the evaluation of the comparability of the work done by the claimants and the comparators.

To use the common terms requirement in this way would permit the fail-safe to triumph over its limited function and substance.