Equal Pay: Who's a valid comparator?

Equal Pay: Who's a valid comparator?

The Supreme Court confirmed on 26 March that ASDA supermarket employees can use warehouse distribution centre employees as valid comparators for their equal pay claim.

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Partner, KPMG Law

KPMG in the UK

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Events in recent years have shone a light on equal pay issues. High profile cases like ASDA could also encourage employees across an organisation to ask whether they are being paid fairly. 

 

This case concerned the equal pay claim bought by predominantly female supermarket employees who claim they are being paid less for equal work compared to their, predominantly male, warehouse distribution centre counterparts. 

What’s the issue?

ASDA operates a network of retail stores across the UK, in which it has approximately 133,000 employees. Staff in the stores are employed on retail terms. ASDA also has 24 distribution centres where approximately 11,600 employees work. They are employed on distribution terms.  None of the distribution centres are located on the same sites as any of the retail stores.

Over 7,000 predominantly female retail employees brought equal pay claims in the employment tribunal, seeking to compare themselves with the higher-paid, and predominantly male, distribution employees. 

Supreme Court decision

The supermarkets and warehouse locations are separate, so the supermarket employees needed to show that common terms applied across these different establishments in order to use distribution employees as valid comparators.

They succeeded before the Employment Tribunal, and both the EAT and Court of Appeal dismissed ASDA’s appeals. The Supreme Court agreed by confirming the employment tribunal finding that the distribution employees would have been employed on substantially the same terms if they had been employed at the claimants’ supermarket site (Asda Stores Ltd (Appellant) v Brierley and others (Respondents) [2021] UKSC 10). 

This decision does not mean the supermarket employees have won their equal pay case, but they can use the terms and conditions of the distribution employees as a valid comparison – this is a significant victory for the claimants. 

They will now need to go on to show that they performed work of equal value to that of their comparators. The employer will be able to rely on any defence open to it, including (if appropriate) that the difference in pay was due to a genuine material factor which was not itself discriminatory on the grounds of sex. 

This case highlights the complexities of defining what is equal work, for which men and women need to receive equal pay. This is a notoriously difficult area.

Impact of the decision and next steps

As well as affecting retailers who have similar remuneration models (indeed others are facing similar claims), this decision could also apply to other employers who have different terms and conditions for different groups or divisions of employees where one group is predominantly male and the other predominantly female.

Moreover, events in recent years have shone a light on equal pay issues. High profile cases like ASDA could also encourage employees across an organisation to ask whether they are being paid fairly.   

To minimise the risk of equal pay claims, business should examine their remuneration policies and working practices and understand their impact across different parts of their workforce.

This can be achieved by equal pay audits and policy reviews, which KPMG has significant experience of designing and delivering. These issues should be considered alongside wider diversity and inclusion strategies.   

Please speak to your KPMG Employment Law contact if you have any queries.

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