Equal pay – this time it’s private

David Palmer

Last week the much anticipated employment tribunal judgment arrived in the Asda equal pay litigation (Brierley and others v Asda Stores Limited). Leaving my equal pay anorak to one side, I am going to discuss why this judgment and its publicity will encourage no-win no-fee lawyers to pursue large-scale equal pay claims against private sector employers.

The ‘pathfinder’

For the last few decades, equal pay litigation has largely involved public sector employers. The Asda litigation is rightly touted as the ‘pathfinder’ litigation for private sector equal pay claims. The claimants’ case against Asda is deceptively simple. They say that predominantly female employees who work in equal-payAsda’s retail stores should be paid the same (higher) hourly rate as the predominantly male warehouse operatives in Asda’s distribution depots. Asda disputes the claims. There are currently more than 7,000 claimants. If they succeed with their case, there are around 130,000 retail employees, male and female, who could benefit. This is no small matter.

Apples and pears

The judgment concerned the preliminary issue of comparability: can female retail staff compare themselves with male distribution staff? This is the legal equivalent of asking whether the claimants and their comparators are apples and apples; or apples and pears. The law permits the former, not the latter.

The tribunal decided that the female retail claimants could compare themselves with the male distribution employees under both UK and EU law. The tribunal appeared willing to disregard Asda’s technical arguments and return to the broad thrust of the legislation. This decision does not appear to have been a surprise to some observers.

The judgment determines a preliminary point only. A decision about liability is years away. The substantial issues are still to be determined, namely whether (i) the claimants and the distribution staff did equal work and (ii) whether the reasons for the difference in pay are lawful. This was a small victory for the claimants but, as I am about to explain, a significant one.

Low-hanging fruit

If Asda had succeeded on the issue of comparability, the claimants’ case would have been dismissed on a technical point of law. Large-scale private sector equal pay litigation may have withered on the vine as no-win, no-fee lawyers would surely think twice about pursuing such claims. However, this judgment shows that it might be easier than thought for employees from one part of a business to say that they can be paid the same as employees of the opposite sex in another part. Examples which spring to mind:

  • Administration staff comparing themselves with sales staff.
  • Support staff comparing themselves with traders.
  • Back-office staff comparing themselves with front office staff.

No-win no-fee lawyers, no doubt spurned by the publicity surrounding this case, may now think the pay arrangements in many large private businesses are like low-hanging fruits – tantalising and lucrative claims, ripe for harvest. Scrumping for claims just became that bit easier.

The future

The tribunal mentioned that its decision is likely to be appealed. If the decision is not overturned, at the very least a higher tribunal or court may give guidance on some of the untested areas of the law. Until then, if you think your business has an equal pay risk, specialist legal advice is recommended. There are steps that can be taken to mitigate the risks, including instructing job evaluation studies from legal advisers to maintain legal privilege (preventing disclosure of the findings in any subsequent legal proceedings) to assess and quantify the risk.

Gender pay gap reporting comes into effect next year in April 2017. Equality of pay is one of the most important goals of society, but gender pay gap reporting is a blunt instrument to fix pay inequality. In practice, there is a risk that the reporting regime will sow the seeds of unmerited equal pay claims. Some employees may, understandably, think they have grounds for an equal pay claim based on the reports published by their employer – but it would be nearly impossible for an equal pay claim to succeed on the basis of the statistical averages in the reports alone.

I understand that a number of prominent claimant lawyers and respondent lawyers think private sector equal pay will be the next big thing in Employment litigation. The publicity being generated by this litigation will only increase the likelihood of claims against other employers. For the private sector, now is the time to take stock and, if necessary, prepare for the blight of equal pay litigation.

Comments published on Employment Talk do not necessarily reflect the views of Allen & Overy.

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