Asda’s recent loss of the latest round of its long-running equal pay dispute has opened the floodgates to similar claims against other retailers.
The Court of Appeal upheld an Employment Appeal Tribunal ruling that the roles of the mostly female shop floor staff were comparable to those in the male-dominated warehouse, where pay is higher.
That was followed last week by law firm Roscoe Reid saying “thousands” of current and former employees had expressed interest in bringing proceedings against Morrisons on similar grounds, in a case they were “very likely to win” following the Court of Appeal ruling.
Morrisons faces a parallel action from Leigh Day, which is also representing Asda workers and bringing claims against Sainsbury’s and Tesco.
Lawyers estimate the big four could have to pay £8bn to 30,000 claimants. And Felicity Staff, an employment lawyer at Taylor Wessing, warns further claims are likely to spill over into areas of retail beyond supermarkets.
So what should businesses be doing to avoid hefty bills of their own?
Asda has argued that no comparison is possible between store and distribution centre (DC) staff because they are in different departments with different methods of setting pay reflecting “market rate in those sectors regardless of gender”.
The Court of Appeal concluded they were in fact comparable after applying what is known as the ‘North hypothetical’, which asks whether staff in one department would still be paid under their existing terms if they worked in the same location as the other department.
Read more: Huge win for Asda workers in equal pay dispute
The Court found, in the claimants’ favour, that if there were a depot at an Asda store, the terms of the depot employees working there, including their hourly wage, would remain unchanged,’ writes Staff in an explainer feature on the firm’s website this week.
The decision is likely to hold sway in future cases and means employers must pay close attention to any predominantly male or female roles which could be seen as similar but have different rates of pay, including those ‘carried out at different sites’, according to Staff.
Companies need to carry out regular “job evaluations” to ensure there are not unfair pay disparities between comparative roles in different departments, says Ellie Pinnells, lawyer at Roscoe Reid.
Equal pay audits must go further than examining the average gender pay gap across the entire business, says Chloe Chambraud, gender equality director at Business in the Community. Companies must also evaluate role equivalence and gender split between departments, making specific role comparisons.
While “some employers have carried out job evaluations to ensure they pay fairly, others haven’t,” Pinnells says. “It’s the latter that could find themselves facing huge equal pay disputes.”
Where businesses find pay differentials between apparently similar roles, they should consider whether there are material differences that justify them, such as one being more physically demanding, says Irwin Mitchell employment partner Alan Lewis.
Read more: How much do supermarkets pay their staff?
Other justifications might be “higher market rates to attract qualified forklift truck drivers”, Lewis adds.
If no such material difference can be established, other than the fact one role is mostly populated by men and the other women, businesses need to recognise there’s a problem to be addressed and open negotiations with workers over potential discrimination. Pay rises and settlement agreements to ‘contain those situations’ should be considered, says Staff.
In Asda’s case, the supermarket has said it remains confident. It was denied leave to appeal against the latest ruling, but plans to petition the Supreme Court directly to contest it.
In any event, it’s only one of three stages in the claim, and workers still face the other two. The first will be to convince the Employment Tribunal the roles are of equal value in terms of their demands. The second will establish whether there is any reason for the pay differential other than sex discrimination.
Equal pay litigation is complex and lawyers warn that cases can take years to progress.
In the meantime, businesses can prepare by ensuring they have the appropriate practices in place now.
No comments yet