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12.Sep.2017

Legal Update: Asda loses equal pay case appeal

The Employment Appeal Tribunal (EAT) has upheld the Employment Tribunal’s decision that female Asda retail employees could compare themselves with the higher paid male Asda distribution centre employees for equal pay purposes. 

Recap
A predominantly female group of over 10,000 Asda store employees raised an equal pay claim on the basis that they should receive the same rate of pay as the Asda distribution centre employees, the majority of whom are male. The claimants argued that in-store work had historically been viewed as ‘women’s work’ and was therefore less valued. Asda argued that store workers could not validly be compared to distribution centre workers because they were not employed under common terms and conditions.  

The Employment Tribunal ruled that the comparison was valid. Asda appealed the tribunal’s judgment to the EAT.

What did the EAT say?
The EAT rejected all ten of Asda’s grounds of appeal. In particular, it emphasised that even although the pay was set by different parts of the Asda business, there was one entity at Walmart board level that had the power to correct any pay inequality. As such, there was a single source. It concluded that the employment tribunal had been correct in finding that the retail store employees could compare themselves to those in the distribution centres. 

What will happen now?
The EAT granted Asda permission to appeal to the Court of Appeal. Given the value of the claims (around £100m) and potential for an adverse decision to have a significant impact across Asda’s businesses, it is expected that they will proceed with a further appeal. If the judgment is upheld again, then the claimants will still need to prove their case to demonstrate that their work is of equal value to the men working at the distribution centres. Asda has already indicated that it will be relying on market factors to justify any difference in pay. If the claimants are ultimately successful, this could spark a significant rise in private sector equal pay claims. 

You can read our earlier article on the preliminary hearing here