Background

Asda has lost in its appeal of a decision of the UK EAT and the Court of Appeal of England and Wales which had found in favour of a group of workers on their interpretation of who an appropriate comparator was for an equal pay claim.

The group of approximately 35,000 workers, predominantly women, claim that in the six years prior to the proceedings, they received lower pay than a valid comparator for work of equal value. The question for the UK Supreme Court was whether the retail employees could use the distribution employees as comparators, even if they worked in a different location. As a result of the UK Supreme Court ruling, Asda’s female retail store employees can now proceed with their claim by comparing themselves to the higher paid male distribution depot employees.

Legal Background

Under English equality law, claimants must point to a “valid comparator” who is a real person employed by the same employer. Under the “same establishment” requirement, the comparator must also be employed either at the same establishment as the claimants, or at another establishment. Should the claimants pick a comparator employed at another establishment and in order to make a “cross-establishment comparison”, the comparator must be employed on “common terms” (not “same” terms).

Common Terms

The claimants were relying on the “cross-establishment comparison” with employees employed at Asda’s distribution depots (who were mainly men). Asda’s position was that these depot employees were not employed on “common terms” within the meaning of the legislation. Asda pointed to the fact that the retail and distribution locations are separate from one another and that the employees at each location have different terms and conditions of employment.

The key question on the appeal was whether the “common terms” requirement for the purposes of equal pay legislation was satisfied. In answering this question in favour of the employees, the Court considered whether the distribution employees would have been employed on “common terms” to their existing terms, if they were based at the retail store. In carrying out this analysis, the UK Supreme Court imagined that the distribution workers could carry out their jobs at a distribution depot adjacent to a supermarket – before asking whether the distribution employees would, in such circumstances, continue to be employed on the same, or substantially the same, terms as they were employed at their own establishment.

In highlighting that the “threshold test” regarding common terms should be tightly applied the Court noted that a line-by-line comparison of terms and conditions is not required ), the Court held that:

The limited function of the threshold test is to “weed out” … comparators who cannot be used because the differences between them and the claimants are based on geographical factors, and possibly also historical factors.

Conclusion

This case may herald a more flexible interpretation of who a valid comparator is under equality legislation in Ireland.

Employees should be live to this when considering the terms and conditions of employees, (particularly employees with protected characteristics, or indeed groups of employees that are made up of higher proportions of persons with protected characteristics) and should bear in mind how any variations in pay can be objectively justified.