Around 1,000 equal pay claims have been lodged in the Employment Tribunals against Asda. The claims arise from female shop-floor staff claiming they are underpaid compared with male colleagues employed in distribution centres, who they claim are doing work of equal value.
With more potential claimants in the pipeline, the case could become the largest ever employment claim in the private sector and if successful may have serious ramifications.
The Equality Act 2010 implements the principal, previously contained in the Equal Pay Act 1970, that men and women should receive equal pay for equal work. There are three types of equal pay claims, which are “like work”, “work rated as equivalent” and “work of equal value”. Anyone employed under a contract of employment is entitled to enjoy contractual terms, which are as favourable as those of a comparator of the opposite sex in “same employment” working at the “same establishment” if they are employed doing equal work.
The claims against Asda are largely being made by female employees who say their work is of equal value to male comparators working in Asda’s distribution centres. The predominantly male workforce in the distribution centres are responsible for taking items off shelves, putting them on pallets and loading them onto lorries. The mainly female staff in the stores claim to do the reverse: removing the pallets from the lorries, unstacking the pallets and putting the items out on the shelves. The women claim that they have been underpaid a difference of between £1 to £4 per hour compared to their male comparators in the distribution centres.
It will be for the Employment Tribunals to decide if the staff are employed on equal work.
Asda have said they will “robustly defend” all equal pay claims, pointing to their award winning reputation as an equal opportunities employer. Asda are likely to initially argue that the female employees and their male comparators are employed at different establishments. However, the Claimants will say that even if they are employed at different establishments from their male comparators, their terms and conditions emanate from a single source i.e. Asda and that Asda are in a position to remedy any pay inequality. The Claimants will also have to establish that their work is of equal value and an independent expert is likely to be appointed by the Tribunal to prepare a report. It will be open for Asda to argue that the work is not of equal value or that the difference in pay is for a non-discriminatory reason or due to a material factor which is not directly or indirectly discriminatory. Asda will have to objectively justify any pay difference if there is a factor that appears to be gender-neutral but, in practice, is having a disproportionate adverse impact on their female staff.
If Asda lose the claims, it will have a serious financial impact taking into account their 370 stores, 23 depots and over 170,000 staff. A loss could result in compensation (being the difference in earnings) going back up to six years. The law firm acting on behalf of the Claimants has stated that they have been approached by approximately 19,000 employees and former employees after it announced in April that the action against Asda was being taken.
Historically, equal pay claims of this magnitude have been restricted to the public sector, with Birmingham City Council having to set aside £1bn to settle equal pay claims to tens of thousands of female council employees. Despite equal pay legislation being in force for over 40 years, estimates place the gender pay gap at around 19.1% for full time employees and therefore equal pay claims are increasingly likely to be brought against private sector employers.