UK Equal Pay Comparators: Supreme Court Rules Comparators May Work in Different ‘Establishments’

The Supreme Court of the United Kingdom has held in Asda Stores Ltd v. Brierley and others that Asda supermarket retail employees can appoint Asda depot workers as their comparators in an equal pay claim despite their working in different ‘establishments’ of the business.

When bringing an equal pay claim, claimants must choose a valid comparator of the opposite sex who is employed in ‘the same employment’. In this case, the question for the Supreme Court was whether the predominantly female store-based claimants were entitled to choose as comparators employees in positions staffed predominantly by male colleagues working in Asda’s distribution sites.

Equal pay legislation in the United Kingdom recognises that some employers may operate using different ‘establishments’, which each use different employment terms and conditions for the employees who work there. Under section 1(6) of the Equal Pay Act 1970 and section 79(4)(c) of the Equality Act 2010, employees working at different establishments will be in the ‘same employment’ if ‘common terms’ of employment apply to the establishments.

Facts of the Case

In 2016, a large number of Asda retail employees (predominantly female) brought equal pay claims to the Employment Tribunal (ET) relying upon Asda depot workers (predominantly male) as their nominated comparators.

Asda applied for dismissal of the claims, arguing that the depot workers were not valid comparators for equal pay purposes because common terms of employment did not exist. Asda argued that the employees’ roles were managed by different departments in the company, were in different locations, and had different terms and conditions of employment.

The retail employees recognised that they did not work in the same establishment as their comparators because Asda’s stores and depots are separate. However, they relied upon the principle that common terms of employment applied to their roles.

The ET, the Employment Appeal Tribunal, and the Court of Appeal each held that the claimants could rely upon the depot workers as comparators. Asda appealed to the Supreme Court. By the time the case was heard by the Supreme Court, the claimants consisted of approximately 35,000 Asda retail employees.

The Supreme Court’s Decision

The Supreme Court has interpreted the ‘common terms’ requirement to mean that if (as was the case here) there are not any employees of the comparator group at the claimants’ establishment, and it is not clear on what terms the comparators would be employed there, the court should apply ‘the North hypothetical test’.

This North hypothetical requires the court to consider whether a comparator group would have been employed on the same or substantially the same terms of employment enjoyed at their own site if they were employed at the claimants’ site. In this scenario, the hypothetical entails imagining whether the depot workers, if situated alongside the retail employees in a retail shop, would retain their depot terms and conditions of employment. If the answer would be yes, they would be considered a valid comparator, as common terms of employment exist. For the purposes of the hypothetical test, it is irrelevant that they would never be employed in this way, as it is not feasible to have a distribution depot at the same site as a store.

The court explained that the North hypothetical is important because without it, employers could allocate employees to separate establishments with different discriminatory terms to avoid equal pay claims. The purpose of the ‘common terms requirement’ is to prevent a person from being treated as a comparator if the person was employed at a different establishment with different terms of employment for geographical or historical reasons.

Asda’s appeal was dismissed on the basis that the North hypothetical was satisfied.

What Does This Decision Mean for UK Employers?

The Supreme Court’s decision does not mean that the Asda retail employees’ equal pay claims have succeeded. The issue before the court related to an important preliminary matter: whether two groups of employees in different establishments could be compared for the purposes of an equal pay claim. The court found that the retail employees would be able to rely upon the depot workers as their comparators to advance their claims.

Proceedings for the equal pay claims will ensue at the ET. The retail employees will now be required to show that their work is of equal value to their comparators.