Equal pay in the private sector

A group of around 400 female workers at ASDA will take on their employer in a pay discrimination hearing which begins in June. The Brierley v ASDA case revolves around the mainly shop floor workers for the supermarket chain who are claiming they should be entitled to the same pay as the primarily male workers in its distribution centres and warehouses on the basis that their jobs are of equal value although the latter are paid between £1 and £4 per hour more.

The claimants who work in shelf stacking roles are likely to say tasks of putting items from a shelf to a lorry are much the same as their role of unstacking items from a pallet and putting them on to the supermarket shelves. Other claimants who work on the checkouts may argue that their jobs are of equal value to the warehouse staff. Their view is that the existing pay discrepancy has been tainted by sex. We understand, however, that ASDA justifies the pay difference on the basis that the warehouse employees work anti-social hours in uncomfortable conditions, a reason it may need to prove is proportionate and legitimate if it is to prevail in the case.

Should the case go against the retailer the repercussions could be huge - claimants will be entitled to six years (five years in Scotland) back pay to make up the current gap between shop floor and warehouse workers and will be entitled to equal pay going forward. ASDA employs around 160,000 staff across the UK. Leigh Day, who represents the claimants in this case, has so far had a reported additional 19,000 enquiries from colleagues.

While this specific case has been lodged by female employees, it is also understood that, if successful, male colleagues in shop floor roles may also pursue equal pay claims which would add to the company’s potential liability.

The case highlights a real challenge to many employers in managing their obligations under the equal pay legislation which requires men and women to be paid the same for carrying out work of equal value. Where jobs aren’t similar on the face of it, it can feel like comparing apples to oranges when trying to determine if two very different jobs are of sufficiently equal value to be paid the same. The Equality Act 2010 does give some guidance on the matter, requiring employment tribunals to look at factors such as ‘effort, skill and decision-making’ in determining the value of a role although often Tribunals rely on the appointment of an independent expert to assess this point. In the past, Tribunals have found fish packers to be equal to general labourers and female speech therapists equal to male clinical psychologists and pharmacists.

While we have seen legal challenges on equal pay from the public sector, this case is one of the first mass claims within the private sector with potentially major implications for other businesses. If successful, it appears likely that other UK supermarket workers may consider making claims if they believe there are pay discrepancies based on gender within their work places. Even if these are ultimately unsuccessful, the supermarkets could incur costs through legal fees and management time in defending such cases.

Beyond supermarkets and other retailers, any organisations where there are predominantly male and female-dominated roles could be at risk if one group earns more than the other in pay, allowances and other bonuses.

Sectors including hospitality, where companies often employ mainly female serving staff and cleaners alongside predominantly male roles such as groundsmen, could become vulnerable. Manufacturing businesses where men might predominantly carry out more physical roles compared to their female counterparts could also be at risk.

While it remains to be seen how Brierley v ASDA will play out, companies which are concerned about facing a similar legal challenge in future can do the groundwork now to mitigate this threat. A lighter touch option would be to carry out a high level review of roles to identify risk hotspots, particularly whether any jobs are dominated by one gender and whether the company pays any allowances or bonuses that can’t be justified of the face of it.

It can also be helpful to have transparent pay, bonus and promotion policies in place. While some companies fear that such a move could open the floodgates to more equal pay claims, we have found that employees who properly understand the remuneration structure and reasons for any difference in pay are less likely to suspect discrimination and take legal action.

For any companies with real equal pay concerns, a more thorough option is to carry out a full equal pay audit and undertake an analytical job evaluation study. This can give employers to address gender pay issues before claims occur and provide them with an automatic defence to equal pay claims. This sort of study does, of course, take time and resources but this is likely to be dwarfed by the cost of having to defend a pay discrimination case and incur the negative publicity which can accompany this.

We will find out soon enough if ASDA has done sufficient groundwork to avoid all these potentially detrimental implications.