UK: Latest Court Of Appeal Decision Allows Retail Staff To Continue Their Long-Running Battle For Equal Pay

Background

The case first began with equal pay claims issued in 2008 and, over time, we understand that approximately 7,000 Asda employees have been added as claimants. Mainly female employees working in Asda retail stores have sought to compare themselves to mainly male employees working in Asda's distribution centres for the purposes of their equal pay claims. The claimants allege that the work they perform is of equal value to their comparators, but that the comparators are paid substantially more than they are. The claimants allege that the differential in pay arises from a historical belief that the work done in the distribution centres is a man's role and so is worth more. Without exception, Asda's stores are on separate sites from its distribution centres.

Despite the first claims having been issued as long ago as 2008, this case has not gone beyond dealing with the preliminary issue of whether the claimants are, in fact, entitled to compare themselves to their chosen comparators. 

Relevant legislation

As many of the claims here were brought prior to the enactment of the Equality Act 2010 (EA), the issues to be determined fall to be considered under both the EA and the Equal Pay Act 1970 (EPA). In order to bring a claim under the EA, a claimant must identify a comparator of the opposite sex:

  • performing equal work (in this case, work of equal value);
  • for the same or an associated employer;
  • at the same establishment or at a different establishment to which common terms and conditions apply.

Case law has established that "common terms" need not be identical. It has also established that if, hypothetically, a comparator would have been employed on their existing terms if they moved to the same establishment as the claimant (whether or not this might actually happen), then "common terms" can be found to exist. The provisions relating to "common terms" under the EA are worded slightly differently from those under the EPA and it has been unclear whether:

  • it was enough that employees in the claimants' group were on "common terms" with employees in their comparators' group (as under the EPA); or
  • whether, under the EPA, the claimants and their chosen comparators had to have any similarity in their terms.

Both the relevant provisions of the EA and the EPA are referable to Article 157 of the Treaty on the Functioning of the EU under which the key question is whether there was a "single source" responsible for the inequality of terms. The claimants argued that, if they were not entitled to compare themselves to their chosen comparators under the EA and the EPA, Article 157 had direct effect so as to allow their claims to continue in any event.

Employment Tribunal and Employment Appeal Tribunal decisions

Both the ET and the EAT agreed with the claimants that they were entitled to compare themselves to their chosen comparators on the grounds that:

  • Article 157 did have direct effect in the UK;
  • where terms came from a "single source" an employee was automatically able to bring their claim under Article 157;
  • Asda's executive was a "single source" of terms and conditions; and
  • there were common terms between the claimants and their chosen comparators which would apply if the location of the distribution centres happened to be the same as the retail stores, so that they formed one establishment.

Asda appealed to the Court of Appeal.

Court of Appeal decision

Following an in-depth analysis, the Court of Appeal agreed with the ET and the EAT that the claimants are entitled to compare themselves to their chosen comparators, even though those comparators work in separate establishments. The Court of Appeal came to its decision based on domestic law and did not believe it necessary to consider the applicability of European Union (EU) law in any detail (although it did pass some relevant comment).

The Court held that the relevant provisions of the EA did not change the law set out previously in the EPA in relation to the existence of "common terms". The Court confirmed that the relevant test, under both the EA and the EPA, is that, where the claimant and her comparator work at separate establishments, "common terms" must apply for employees of the claimants' group and employees of the group at each of the separate establishments. It is irrelevant whether the claimant and her comparator have, themselves, any similarity in their terms.

However, the Court disagreed with the approach taken by the ET and the EAT in determining whether the terms between retail store employees at one establishment were broadly similar to those of the distribution centre employees at another. It held that the correct test is whether the terms of the two groups of employees are broadly similar across their respective sites as a whole, so that a distribution centre employee would be employed on the same terms regardless of which site they actually worked at.

The Court of Appeal did agree with the ET and EAT's finding that, in this case, Asda applied "common terms" for retail store employees and distribution store employees wherever they worked. The Court also held that this would apply even where, in practice, the two groups of employees would never actually work at the same establishment. Accordingly, the claimants were entitled to compare themselves to their chosen comparators, and the ET had not erred in declining to strike out their claims on this basis.

On the EU law element, the Court of Appeal commented that, as both the retail store employees and the distribution centre employees were employed on terms set by the same employer, they were derived from a "single source". However, on the question of the direct effect of Article 157, the Court commented that, had this been determinative, it would have been necessary to refer this issue to the European Court of Justice. As it happened, the claimants were able to continue with their claims under domestic law, so no such reference needed to be made.

Asda applied for permission to appeal to the Supreme Court but this was denied.

Comment

Whilst the Court of Appeal's decision does not change the law as such, it does highlight how broad an equal pay claim based on work of equal value might be. It is not automatically obvious that supermarket employees working within retail stores can compare themselves to employees working in distribution centres where their job descriptions and the locations at which they work are quite different. However, it is clear that the equal pay legislation may go so far as to require equality of pay for all employees working for the same, or associated, employers where their work provides equal value for the employer. This applies regardless of how the business is structured, or where (in the UK) the employees are located.

By no means does this mean the end for Asda's defence of the claim. The comparator point is preliminary issue and the ET is yet to hear the merits of the claim or to consider whether, in actual fact, the work performed by the retail and the distribution staff is work of equal value. That will be the real turning point of the claim.

Given the financial and reputational consequences if the claim against Asda is successful, it remains a possibility that Asda could seek permission directly from the Supreme Court to appeal the Court of Appeal's decision on whether the claimants are entitled to rely upon their chosen comparators.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions