09 November 2016

Equal Pay – can store workers compare themselves with depot staff for equal pay?

This article was written by Gina Unterhalter, Associate

On the facts of Brierley and others v. ASDA Stores Ltd, the Employment Tribunal (“ET”) has decided – as a preliminary issue – that they could. The ET found that both store and depot staff are employed on “common terms” under the equal pay parts of the Equality Act 2010 and the (currently) directly enforceable European law that underpins it.

This case concerns equal pay claims from about 7,000 current and former (mainly female) hourly paid store colleagues who sought to compare themselves with the (mainly male) workforce at the company's distribution depot. The claimants argue that the predominantly male workers in Asda’s distribution depots are doing work of equal value to them, and yet are being paid substantially more.

The Equality Act test for whether a comparison could be made between the two groups for equal pay purposes was whether there were "common terms" between them. This test was met, despite the different locations and the fact that terms varied according to where an employee worked. The claimants' terms were broadly similar to those of the depot employees – they were all hourly paid and there was a strong correlation between the structures of the respective staff handbooks. It didn’t matter that terms were negotiated in different ways for the two groups. There were differences in specific terms, but the Tribunal concluded that they were not significant. In addition, the Tribunal found that there was a single source of the terms and conditions; the executive board of Asda and the members of the subcommittees of that board who exercised budgetary control and oversight over both retail and distribution and were therefore a single source. This finding provided an alternative route for an equal pay claim under EU law (at least for now).

The focus of the litigation will now turn to the more substantive issue of whether the claimants’ store work is of equal value to that done in the distribution depots, subject to any appeal Asda makes in relation to this preliminary decision.

What does this mean for employers?

The Tribunal's approach to the issue of whether terms and conditions have a common source highlights the potential exposure of employers more generally as in many cases separate business divisions will operate under the mandate of a single board oversight. However, these cases are always highly fact sensitive; in the judgment, the tribunal highlighted "the almost unremitting variety of factual circumstances" that could apply, so it would be unwise to draw specific conclusions for other businesses without detailed analysis of the facts.

This case also highlights a continuing focus on gender pay gap and equal pay issues in the workplace especially in the light of the new gender pay gap reporting regime anticipated to come into force in April 2017. This regime is intended to encourage employers to review their workforce pay arrangements and take steps to reduce any gender pay gaps and potential pay discrimination issues that may be found.

However, this may prompt some employees to scrutinise their rates of pay and compare them to colleagues whose work they regard as of equal value to their own.  With this in mind, employers should note that any term in an employment contract or employee handbook prohibiting the disclosure of the employee's rate of pay is unenforceable if the disclosure is made for the purposes of assessing if there has been any pay inequality. In addition, subjecting an employee to detrimental treatment because they have disclosed their pay details or sought those of another employee for the purposes of exploring if there has been any pay inequality will constitute an act of victimisation under the Equality Act.

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