Outer Temple team successful in Supreme Court Equal Pay hearing – Asda Stores v Brierley

In a judgment handed down this morning, the Supreme Court unanimously rejected Asda’s appeal and held that the Claimants (35,000 predominantly female retail employees) can use male distribution employees as comparators for the purposes of an equal pay claim. Andrew Short QC, Naomi Cunningham and Paul Livingston were instructed by Leigh Day to appear on behalf of the Claimants.

The claims are brought on the basis that retail employees are paid less than distribution employees despite doing work of equal value. Asda had argued that the distribution employees were not valid comparators as they and the retail employees worked at different locations and were not employed on “common terms” within the meaning of the legislation. This argument was previously rejected by the Employment Tribunal, the Employment Appeal Tribunal and the Court of Appeal.

Giving the unanimous judgment of the Supreme Court, Lady Arden set out that for the ‘common terms’ requirement to be satisfied, all that is required is that the terms and conditions must be broadly the same at the comparators’ and the claimants’ establishments. This does not mean the “same” terms nor require a line-by-line comparison of the retail employees’ terms and the distribution employees’ terms. Instead, a broad comparison is needed to weed out comparisons which cannot realistically be made because the differences in terms are based on geographical or historical factors. This is a threshold test, and the court noted that “Cases where the threshold test cannot be met are likely to be exceptional.”

Where there are no comparators who work at the Claimants’ establishment (i.e. distribution employees working in the retail stores), this threshold test can be conducted by asking whether the comparators would be employed on the same or substantially the same terms if (hypothetically) they were employed at the claimants’ establishment, continuing to perform their existing role. This has become known as the ‘North hypothetical’. If the core terms are unaltered by a hypothetical relocation, then the common terms requirement is satisfied, and the comparison is permissible. In this case, the hypothetical could be visualised by the installation of a depot next to a retail store. The Supreme Court held the Employment Tribunal was entitled to conclude that the terms would not have changed in such a scenario.

The Supreme Court also noted, this being its first opportunity to consider equal pay under the Equality Act 2010 (“EA 2010”), that it was entitled to take account of the imposition of positive equality duties as part of the wider context in which it must interpret and apply the equal pay legislation. The Court stated that the EA 2010 “is inconsistent with any notion that Parliament thought it was time to take its foot off the pedal” and that “there is no longer any need (if there was) to explore the provisions cautiously as might be the case if the provisions were novel”.

Finally, the Supreme Court expressed the view that in the future, Employment Tribunals should not allow a prolonged enquiry into this threshold test – elevating it into “a major hurdle” would thwart the purpose of equal pay legislation. Employers will still have the opportunity to show that pay disparities are justified when the value of the claimants’ work is evaluated as against the comparators, or if it raises a ‘genuine material factor’ defence arguing that there is a good, non-discriminatory, reason for differences in pay. To use the common terms requirement to argue these points would, according to the court, “permit the fail-safe to triumph over its limited function and substance.”

The claims will now continue to progress with the evaluation of whether the Claimants did work of equal value to the comparators.

Judgment

The judgment can be read here and the press summary can be read here.

Find out more

Andrew Short QC is a leading employment silk. Andrew’s employment practice covers everything from complex or sensitive dismissal and discrimination cases through TUPE to high value contract, restrictive covenant, fiduciary duty and equal pay claims. He has acted in many of the leading cases relating to discrimination in pay and pensions, including Abdulla v Birmingham City Council, McCloud v Lord Chancellor, and Sargeant v LFEPA.

Naomi Cunningham is a leading employment junior. Naomi accepts instructions in goods and services discrimination as well as in the full range of employment matters. She has particular interests in sex discrimination (including equal pay) and gender reassignment discrimination; and the operation of the single sex exemptions in the Equality Act. She has been instructed in a number of multi-claimant equal pay cases, including Element and others v Tesco Stores Limited, led by Keith Bryant QC.

Paul Livingston regularly acts and advises in a range of Employment Tribunal claims and other employment matters. He is regularly instructed to advise or represent large companies, SMEs, local authorities, individuals, charities and trade unions across a variety of sectors – including telecommunications, transport, healthcare, housing, retail, energy and education. Paul has also appeared in a number of Employment Appeal Tribunal cases, including: Q v Secretary of State for Justice and Oyesanya v The Pennine Acute Hospitals NHS Trust.

Find out more about our employment practice on our expertise page or contact our Employment Practice Management Team: Nick Levett (+44 (0)20 7427 4908) or Adam Macdonald (+44 (0)20 7427 4906) or call us on +44 (0)20 7353 6381 for a confidential discussion.

News 26 Mar, 2021