Supreme Court signals bold new approach to equal pay litigation

Asda's final appeal against the employment tribunal’s ruling on the issue of comparators has now been dismissed by the Supreme Court. In doing so it has signalled the need to apply the equal pay legislation “with confidence…with Parliament’s purpose clearly in mind.”

The claimants and their proposed comparators worked at different “establishments”, so the claimants had to show that “common terms” applied across all relevant establishments. Without surmounting this hurdle, it would not have been possible for the 35,000 odd supermarket-based claimants to compare their pay with that of their predominantly male colleagues working in warehouses in different locations.

One of the difficulties the claimants faced was the fact that the pay of Asda's distribution workers was covered by collective agreements (for largely historical reasons) but supermarket workers’ pay was not fixed by collective bargaining. Previous case law shows that common terms will readily be inferred where both establishments are covered by collective bargaining arrangements with the same employer.

The Supreme Court has set out a new simplified approach to help tribunals determine this preliminary issue in the future. In essence it has said that the common terms requirement is “intended to operate only within a very narrow compass where the differences in terms and conditions are wholly or mainly derived from the physical separation of the comparator’s establishment”.

In practice this means that employers will find it considerably harder to defeat an equal pay claim which involves a cross-establishment comparison at a preliminary stage. However, where a pay disparity is established employers will of course still be able defend the claim either on the basis that the work is not of equal value, or by proving that there is a "material factor" which explains the difference in pay, which is not tainted by sex discrimination of any kind.