Equal pay claims: who is the appropriate comparator?

In a case of huge significance for the retail sector the Supreme Court has confirmed that employees working in Asda’s retail stores can compare themselves with employees working in the distribution operation for the purposes of equal pay.

This does not mean that the retail employees have won their equal pay claims. The Supreme Court decision is only concerned with one element of an equal pay claim; who is the relevant comparator for equal pay purposes. It is yet to be decided whether the comparators do work ‘rated as equivalent’ or of ‘equal value’ and whether Asda has a ‘material factor’ defence to differences in pay.

That said, the Supreme Court decision on comparators for equal pay purposes still carries huge ramifications for the retail sector, who may face backdated equal pay claims from employees using cross establishment comparators. Organisations may also face increased scrutiny of their pay and reward policies.

Equal pay: a recap

The Equality Act provides that men and women should receive equal pay for equal work, or work of equal value. For equal pay comparisons, claimants and their comparators need to be employed by the same or associated employer and work at either the same establishment, or at different establishments at which common terms apply.

The Supreme Court decision

The Supreme Court has confirmed in Asda Stores v Brierley that female retail store employees can compare themselves to a group of male distribution depot employees for the purposes of an equal pay claim because common terms were applied at the different establishments.

It stated that the aim of the expression ‘common terms’ is to allow claimants to use comparators at different establishments and that the key question was a hypothetical one; on what terms would distribution workers be employed if they worked at the same site as retail workers. It was not relevant that retail workers were not employed at depots or distribution workers in stores, or that distribution workers could not physically perform their role at a retail site.

For the purposes of establishing common terms, the Supreme Court also confirmed that it did not matter if there was a single or multiple collective agreement governing the terms of employment or whether the employer imposed terms on employees. Lastly, the Supreme Court strongly discouraged employers from using the hurdle of an inappropriate comparators to prolong or delay equal pay claims.

5 top tips to manage risk

“This decision, though significant, has not come as a surprise and it is just one stage in what is a complex case. The next stage will be to consider if the jobs are of equal value and then if there are reasons (other than gender) why employees in store are not getting the same rates as those in warehouses. The sector and employers will undoubtedly continue to monitor this cases as it progresses and the full impact becomes known.” Fiona Powell, Managing Associate