Under the Equality Act 2010, men and women have the right to receive equal pay for equal work doing the same job. But this right also extends to work which is broadly similar and work that rates as equivalent ie, the level of skill, responsibility and effort needed are equivalent or work which is of equal value but not similar but where the level of skill, training, responsibility or demands of the working conditions are of equal value.
For the above to apply there must be a suitable comparator working at the same establishment or elsewhere and there must be in place common terms and conditions that are broadly the same.
Employment tribunal
In 2016 over 35,000 Asda store staff mainly female, took an Employment Tribunal case against Asda claiming that their work was of equal value to that of workers in distribution centre who were predominantly male employees. They claimed that there was no material factor justifying the difference on pay arrangements ie common terms were in place, where Asda argued that the comparison did not apply as they were different departments and pay rates were justifiably different.
The Employment Tribunal, Employment Appeal Tribunal and then by the Court of Appeal dismissed Asda’s defence and in the Court of Appeal, Lord Justice Underhill in his judgment ruled that for both retail workers and distribution workers, Asda had “applied common terms and conditions wherever they work”.
Asda appealed to the Supreme Court (SC), who dismissed the appeal and applied the ‘North hypothetical’ from the case of Dumfries and Galloway Council v North. They described this as a ‘threshold test’ (namely to ask hypothetically whether the type of employees in question would remain on substantially the same terms if they were transferred in their current roles to the other site. If their core terms were unaltered by the hypothetical relocation, then the common terms requirement would be satisfied).
The (SC) emphasised that cases where the threshold test cannot be met were likely to be exceptional, for example it might not be met because geographical or historical considerations but the argument that the parties have no common terms is no longer likely to be a good defence.
Threshold test
The (SC) highlighted that the ‘threshold test’ should not be a prolonged exercise and is thus a low threshold to establish although employers would still have other arguments to deploy such as showing that differences in pay were justified on the value of the work carried out by the comparator or that a ‘genuine material factor’ defence applied and thus able to show genuine non-discriminatory business reasons for differences in pay.
The consequences of the (SC) decision is that a successful claim could result in back pay of unpaid salary up to a maximum of six years from the date proceedings were filed with a Tribunal in England and Wales normally which an employee must do so within 3 months less a day of the breach or last breach if continued act (Section 23 (2) and (3) Employment Rights Act 1996 -ERA).
The article is for general information purposes only and should you require any further assistance on the matter please do not hesitate to call our advice-line team on 01455 852028.
