In Asda Stores Ltd v Brierley and others, the Employment Appeal Tribunal (EAT) held that store employees could compare themselves to employees working in distribution depots because this single source test was satisfied.
Under the Equality Act 2010, employees bringing an equal pay claim who wish to compare their pay to employees working for the same employer must show that common terms and conditions apply. EU law also enables a comparison to be made where there is a ‘single source’ of pay and conditions which is responsible for any inequality and which could restore equal treatment.
Around 7,000, mainly female, retail employees have brought equal pay claims against Asda alleging that they are paid less than the mainly male distribution centre employees despite doing work of equal value. As a preliminary issue, Asda argued that the claims should be struck out because it is not possible to compare two groups of staff who work at different sites and have distinct terms of employment set by separate procedures. For example, the retail staff terms apply only in stores and are set by the Asda Board, whereas the distribution staff terms are set mainly through collective bargaining.
The EAT rejected Asda’s arguments, confirming that the Employment Tribunal had been correct to conclude that despite these differences, ultimately responsibility for pay for both groups derives from a single source: Asda’s Executive Board, which is itself subject to governance by Wal-Mart. The EAT also held that there are significant similarities in the employment terms of the claimants and the comparators. However, the EAT granted Asda permission to appeal to the Court of Appeal, noting that there were strong arguments in favour of both parties that should be considered at a higher level and potentially also referred to the ECJ.
If this case proceeds, other issues will remain to be considered, including whether the claimants carry out work of equal value to their male comparators, and whether the material factor defence applies to justify the pay disparity. Given the complexity of the equal pay legislation, this litigation could therefore last for many years. This case is a reminder to employers to assess the risks of equal pay claims across their organisation, for example, within a group of companies where the parent company board has the ultimate power to set pay.