It ‘Asda be equal

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It ‘Asda be equal

A recent decision in the Court of Appeal has highlighted that employees in Asda supermarkets are able to compare their salary with Asda depot workers as part of an equal pay claim.

Around 30,000 employees, the majority of whom are female, brought equal pay claims as they feel it is unfair that predominately male workers in Asda’s distribution depots are paid more. Asda did not agree that the two parts of the business were comparable and, despite losing at both an Employment Tribunal and an Employment Appeal Tribunal, continued to fight their corner at the Court of Appeal.

Asda’s argument was that the two businesses had developed separately from each other. The distribution part of the business had been outsourced previously with varying terms and conditions across locations, none of which shared their sites with any of their retail outlets.

However, after taking that part of the business in-house, they negotiated with the relevant trade unions to, in most locations, harmonise the terms of the workers across their depots. Asda also argued that the retail and distribution operations were effectively part of two completely different industries and that the work carried out was not comparable. In addition, the depots are unionised and negotiations on pay are dealt with at each location with the relevant trade union.

However, the similarities between both areas pointed towards it being part of one business and, despite having two different management structures, all pay decisions have to be sanctioned by the Asda Board of Directors (and in turn their parent company, Wal-Mart) and that comparable benefits apply across both businesses, such as hourly pay, bonus, eligibility for a discount card, pension contributions and family-friendly leave.

The argument for comparisons to be made therefore was that Asda’s two areas of business were effectively run by the same employer for a realistic comparison to be made. The fact that a retail worker’s role would potentially be more sedentary and less physical than a depot worker was disregarded as a result of this.

Ultimately the terms and benefits handed down to both sets of employees came from a ‘single source’. The Court of Appeal used legal precedents to conclude that the two parts of the business applied ‘common terms’ to the employment across both sides of the business so it was valid for a comparison to be made.

The Court of Appeal applied the hypothetical test from an earlier case (North v Dumfries and Galloway Council) as to whether, if the comparators were employed at the claimants’ establishment, "they would be employed under broadly similar terms to those that they are employed under at present". In this case, the answer to this hypothetical question was yes.

This case sets its own precedent for future cases to be decided upon and stresses the need for all employers to ensure that they are providing equal pay across all areas of their businesses, especially if the terms and conditions are common across establishments and as per the North hypothetical test.

With gender pay reporting legislation requiring employers with 250 or more employees to publish statutory calculations every year showing how large the pay gap is between their male and female employees, it’s a wise option for businesses to keep this high on their agenda.