Supermarket retailer Asda has lost its appeal to the Supreme Court, in which it argued staff working for one area of the business could not compare themselves to others for equal pay purposes.
The long-running case centres on shop floor workers - mostly women - who said they should be paid the same as higher-paid distribution warehouse staff, who are mostly men. They claimed the work they do is of equal value.
However, while the Supreme Court dismissed Asda’s appeal and said the principle of ‘common terms and conditions’ can now be used by retail workers to compare against distribution workers, it did not mean the female Asda staff involved have automatically won their case for claiming backdated pay.
The presiding justice said: “The essential question was whether the common terms criteria could be applied, and in making its judgement we dismiss Asda’s appeal. But it does not mean Asda employees have won their equal pay case. It just means that staff can use the common terms as a comparator. They still need to prove that their work is comparable.”
Asda had appealed The Court of Appeal’s original 2019 decision, which ruled that the two groups of workers could compare wages for equal pay purposes, upholding the rulings of the employment tribunal and the Employment Appeal Tribunal.
Commenting on the finding, Jane Amphlett, partner at law firm Howard Kennedy, said: “Today's result means that the [equal pay] claims will be able to proceed, and Asda may well end up with a multi-million pound bill.”
She added: “The impact goes beyond these claimants. The result means that large employers can't avoid equal pay obligations if male and female-dominated roles are based at different locations.”
She said: “Equal pay cases have historically been seen as a public sector issue, but private sector businesses can't assume they're immune, particularly as social media is now used to recruit claimants for mass claims and crowdfunding can be used to fund them.”
With the judgement as it is, it is now likely law firm Leigh Day, which is representing around 38,000 Asda staff in the case, will now progress with an equal pay claim. If successful, payouts could total £8 billion, as other retailers are also facing their own similar cases. Amphlett said: “Cases against Tesco, Sainsbury's and Morrisons are already afoot.”
Commenting on the case, Anne Pritam, partner and employment lawyer at Stephenson Harwood, said: “It would be difficult to underestimate the significance of this judgment which will send shockwaves far beyond Asda. While tens of thousands of shop floor workers will be celebrating today, major retailers will be anxious that the equal pay battle takes a step closer to blowing a multi-billion pound hole in their Covid-depleted coffers.”
But she added: “This decision answers the legal question of whether shop-floor and warehouse roles are comparable, but there is still a very long way to go in proving these roles are of equal value. The next hurdle for the claimants will be showing that the work of the shop floor staff is of equal value to the distribution staff and there is no material factor which justifies differences in pay.”
