In Asda Stores Ltd v Brierley and others (UKEAT/0011/17/DM), the Employment Appeal Tribunal has granted Asda permission to appeal a decision in which store workers claiming equal pay were judged to be entitled to compare themselves to employees based in the company's distribution centres.
Employment tribunal decision
Asda applied for 7,000+ equal pay claims to be struck out on the grounds that a comparison between employees based in Asda stores and those based in distribution centres is not legally permissible. The judge in the employment tribunal (ET) found in favour of the claimants and held that the comparison is legally permissible so the claims could proceed to the next stage of the equal value process.
There are two legal tests that apply to an equal pay comparison between employees who work for the same employer (or associated employers) in different locations:
- The UK "same employment" test, now contained in the Equality Act 2010, requires there to be common terms and conditions either generally or as between A (the claimant) and B (the comparator).
- The EU "single source" test requires there to be a 'single source' of terms and conditions of employment in the form of a 'single body responsible for any inequality and capable of restoring equal treatment'.
The Equal Pay Act test, which applied before 1 October 2010, required there to be common terms and conditions 'either generally or for employees of the relevant classes', which was found to be satisfied where the claimants form a class of employees who enjoy common terms, and the comparators form a separate class of employees who enjoy common terms.
The ET found that the UK test had not changed, despite the Equality Act appearing to require there to be a comparison between the claimant and the comparator.
The financial oversight of both parts of the business by the Asda board of directors and related sub-committees was considered to be sufficient to satisfy the 'single source' test, which the ET found to be directly applicable in the UK. Asda appealed to the Employment Appeal Tribunal (EAT).
Employment Appeal Tribunal decision
The EAT also found in favour of the claimants, approving the ET decision.
The judge however granted permission for Asda to appeal to the Court of Appeal, recognising that there were strong arguments in favour of both parties that would need to be considered at a higher level, and potentially referred to Europe (if this route continues to be available at the relevant time).
UK employers deserve clear guidance from the courts on the question of what is an appropriate comparison for an equal pay claim.
Neither UK nor EU law permits a hypothetical comparator yet the UK courts continue to apply EU law to a situation in which UK law is interpreted as allowing a comparison with a hypothetical comparator where the actual comparator is based at a different location from the claimant.
This additionally involves treating the test in the Equality Act as saying something different from what it actually says. The requirement is to compare the claimant with the comparator. According to the courts, this includes an assessment of whether a hypothetical person assumed to be based at the claimant's place of work would be employed on common terms, as compared with the actual comparator who is based elsewhere.
Clarity is urgently required in relation to the UK legal position first and foremost, although interestingly this may be one of the first cases in which the senior courts in the UK have to decide how the law in this country should be interpreted post Brexit.