Asda workers win! The Supreme Court decision regarding equal pay in the supermarket

by | Jun 17, 2021 | News

Earlier in the year Asda were in the headlines when they lost equal pay fight in the UK Supreme Court.  This ruling paved the way for store staff to claim millions of pounds worth of compensation because of many years of unequal pay.

Although the case could take years to conclude due to its complexity, more than 40,000 store workers, (the vast majority of which are female) argued that (mainly male) staff working in the distribution depots received higher pay – between £1.50 and £3.00 an hour difference in rates.

Although Asda argued that the two types of roles were very dissimilar (due to the difference in physical working environments), the Supreme Court ruled against the company and decided that store workers had every right to compare themselves to those of the distribution centre in their fight for equal pay.

Though this may come as a shock to those of us only just hearing about the ruling, it is in fact the fourth time Asda has faced such an outcome. With the first ruling being made in 2016 in favour of workers which was upheld at the appeal hearing in 2017 and again at the Court of Appeal in 2019.

The ruling has again marked a key victory for Asda shop workers in their lengthy dispute surrounding equal pay and represents a step in the right direction in the fight for equality there is still unfortunately a long way to go.

A spokesperson for Asda said that “equal value should not be confused with gender pay equality as the two are completely separate” but nonetheless the Court considered this case to be an important victory for Asda shop workers and should the next stage of the process conclude that the roles are of equal value, the retailer may  have to pay each claimant up to six years’ worth of back pay – which could be an average of £10,000 per worker.

The case will without doubt be observed closely by other retailers who have their own distribution centres, with their HR and legal teams following each stage of the case in order to stay one step ahead of the huge implications that could inevitably impact on them too.

Tesco employees are also pursuing equal pay claims.  A recent decision by the Court of Justice of the European Union (CJEU) states the ‘single source’ test under EU law, does apply to UK businesses even though the UK is no longer part of the UK.    The ‘single source’ text is where work done in different locations can be compared for the purposes of equal pay if there is a ‘single source’ for the terms and conditions of employment.

Like the Asda case, thousands of Tesco staff, mostly women, brought the case to tribunal arguing they are not being paid equally for work of equal value compared to colleagues, mostly men, who work in the supermarket’s distribution centres.

So, what does equal pay actually mean?

Lady Arden, who dismissed Asda’s appeal confirmed that the T&C’s of the floor staff and warehouse workers can be compared, even though the groups work at different establishments, so what are the key elements to consider when debating equal pay?

Equal pay means that someone must not get paid less compared to someone else who is of the opposite gender or doing equal work for the same employer, this includes salary, wages, pension, annual leave allowance, holiday pay, sick pay, redundancy pay, performance related pay and benefits.

The term ‘equal work’ can be a source of confusion for employers.  Broken down, ‘equal work’ counts as:

  • Like work meaning the job and skills required are the same or similar.
  • Work rated as equivalent means that the result of a fair job evaluation has deemed the level of skills, responsibility and effort needed for the role are equal.
  • Work of equal value means that although the work is different, the level of skills, training or demands of the working conditions are of equal value and therefore deserving of equal pay.

Sometimes a difference in pay can be allowed in certain circumstances even if two people carry out similar work.  For instance, this could be the case for people who are better qualified and therefore their extra knowledge is crucial to the role and makes them hard to recruit.

A further example could be if two people are located in different areas for example in London where the cost of living is higher. However, receiving more pay should never have anything to do with someone’s gender or any of the other nine protected characteristics that are covered in the Equality Act 2010.

Though we have made undeniable progress in closing the gender pay gap over recent years, with employers with more than 250 staff now being required to report their organisation’s gender pay gap annually on the 5th of April, there is still significant work to be done.

Employers who know they have a wide gender pay gap and wish to achieve equal pay should carry out an equal pay audit or equal pay review with a commitment to balancing the difference for their entire workforce.

Employers should also focus on ensuring that hiring and promotions are fair so that men are not rated more highly in the organisation or favourited for senior roles that consequently have a higher salary.

Finally, employers should strive to make sure women have equal opportunities for development and don’t miss out on training or courses if they work part time for example, this could make the women in your workforce fall behind through no fault of their own and would impact on the pay gap.

Not only is having equal pay important from a legal point of view, but it also has many benefits to organisations because it sends a positive message to all stakeholders about the organisation’s values.

Furthermore, employees will be much more motivated and committed to the business, meaning they will have increased productivity, reduced absence and consequently a smaller labour turnover which as a result will minimize the costs of recruitment and retraining.

If you are an employer who would like to take action to tackle your own pay gap, contact us today to arrange an equal pay review.