Female supermarket staff can compare themselves against male distribution employees for equal pay purposes.


We look at the Supreme Court judgment that held that female staff can compare themselves to male staff with different job and location for equal pay purposes.

Issue

Whether the (female) retail employees could use the (male) distribution employees as comparators under the common terms requirement of the Equality Act 2010.  

Statutory background 

Claimants in equal pay cases must meet the common terms requirement when their chosen comparator is employed at a different establishment of the employer. The statutory test is whether there are common terms as between the comparators at their establishment and the comparators if they were working at the claimant’s establishment. 

If there are no employees of the comparator’s group at the claimants’ establishment and it is not clear on what terms they would have been employed there, the court or tribunal applies what is known as the North hypothetical which considers whether the comparator’s group would have been employed on broadly similar terms to those which they have at their own establishment if employed at the same site as the claimants.  

The single aim of the common terms requirement is to enable claimants to treat as comparators employees at different establishments if their terms and conditions would have been substantially the same if they had been employed at the same establishment as the claimants. 

In other words, where there are no employees of the comparators’ class at the claimants’ establishment, it boils down to asking the simple question: would the comparator have been employed on the same or substantially the same terms if he had been employed in the same role at the claimants’ establishment? 

The purpose of the legislation was to allow comparisons to be made between workers who did not and would never work in the same workplace. For example, a manufacturing company where the female clerical workers worked in an office block whereas the male manufacturers worked in a factory.  

Proceedings

The claimants in this matter who are predominantly female are or were employed in Asda’s retail business. They bring equal pay claims seeking compensation on the basis that they received less pay than a valid comparator for work of equal value to that done by the comparator. 

The claimants rely on a cross-establishment comparison with employees employed at Asda’s distribution depots who are predominantly men. Asda contends that they are not employed on “common terms” as the retail and distribution locations are separate from one another and the employees at the different types of location have different terms and conditions of employment. 

The question whether the retail employees (the claimants) could use the distribution employees as comparators was tried as a preliminary issue. The claimants succeeded before the employment tribunal and Asda unsuccessfully appealed to the EAT and the Court of Appeal before the matter reached the Supreme Court.  

Supreme Court judgment 

The Supreme Court concluded that applying the North hypothetical the employment tribunal was entitled to conclude that the distribution employees would have been employed on substantially the same terms if they had been employed at the claimants’ site and that they would not have received the retail employees’ terms. 

Applying the North hypothetical, the Supreme Court held that the question was whether the classes of employees in question would remain on substantially the same terms if (hypothetically) they were transferred in their current roles to the other site. If their core terms are unaltered by the hypothetical relocation, then the common terms requirement is satisfied and one group may be a comparator for the other, the reason being that any difference due to difference of location can be eliminated. 

Implications 

The judgment is important in clarifying the parameters in which the common terms requirement applies, and provides clarity and guidance on future case management issues raised by the common terms requirement involving a cross-establishment comparison.  

It must be remembered that all that has been determined is that the claimants can use terms and conditions of employment of the distribution employees as a valid comparison. They must still show that they performed work of equal value, which is a factual question for a fact-finding tribunal, and for that purpose, Asda will be able to rely on any defence open to it including the genuine material factor defence.

Key contact

Sungjin Park

Sungjin Park

Knowledge Lawyer, Employment
London

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