As many as 130,000 ASDA staff could bring equal pay claims to their employer

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As many as 130,000 ASDA staff could bring equal pay claims to their employer

As many as 130,000 ASDA staff could bring equal pay claims to their employer

The Employment Appeal Tribunal (EAT) upholds the decision that work on ASDA`s shop floors is comparable with work in ASDA`s distribution centres, meaning as many 130,000 staff could bring equal pay claims. 

Under the Equality Act 2010, men and women are entitled to equal pay for equal work. The three categories which can label work as equal, as set out in the act, are ‘like work’, ‘work rated as equivalent’ and ‘work of equal value’. These definitions gave legal basis for a claim of equal pay for equal work between workers on ASDA`s shop floor and workers in the retailer’s distribution centres.

The claimants in this case argued that the reason for the gap in salaries between the departments was the traditional perception of the shop floor work as ‘women`s work’ with the work in the distribution centre being considered as ‘men`s work’.

The EAT upheld the decision of Judge Ryan, who in October 2016 ruled that the work was comparable and thus the claims of over 10,000 men and women could continue. In doing so, the tribunal rejected the appeal made by ASDA on ten different grounds, including claims that the work was non-comparable because the stores and distribution centres were run by different departments and the assertion that different pay systems operated in the departments.

As a result of this decision, approximately 130,000 staff could make equal pay claims against their employer worth as much as £100 million in total. This is a result of the fact that workers in ASDA`s stores earn between £1 and £3 an hour less than their equivalents in the distribution centres (according to claims made by the law firm representing the claimants by Leigh Day).

However, in order for the claimants to receive any compensation, several other decisions must go in their favour. Firstly, the Employment Tribunal must find that the jobs are of equal value in their demands and only at that point will the Employment Tribunal then consider whether this can be explained by rational factors such as the different market rates in different sectors. If the latter is determined to be the reason, as opposed to a form of discrimination, then the claims will be unsuccessful.

As a result there are still a number of significant legal proceedings to be undertaken before a final ruling on whether the pay scheme of ASDA violates the Equality Act of 2010.

We will keep you updated as and when the ruling is handed down. For further information on this topic, please do not hesitate to contact Millie Kempley or a member of the Employment Team on 0345 070 6000.