The Office for National Statistics (“ONS”) reported on 26 October 2016 that the gender pay gap between men and women (for full-time workers) has fallen from 9.6% in April 2015 to 9.4% in April 2016 which is, of course, positive news.
This however might not be public perception or opinion following a recent high profile case in the news involving a major retailer.
For those who have missed it, a mass equal pay claim by employees at ASDA will proceed to tribunal following a recent decision where it was ruled as a preliminary issue that a group of Asda shop workers can compare themselves to depot workers for the purpose of pursuing an equal pay claim.
The claim in question is being pursued by more than 7000 former and current ASDA staff, mainly women, who claim their work stacking shelves and on the checkouts is equal to that in the supermarket’s distribution centres, where the workforce is largely male and are claiming historical discrimination.To be able to bring the claim under the Equality Act 2010 it was necessary for the female workers (the claimants) to show that the depot workers (the comparators) were employed by the same employer and were either employed at the same establishment or a different establishment but with ‘common terms’.
In practical terms Asda resisted the claim asserting that, due to its corporate structure and the retail and distribution operations being separate, the pay-setting powers had been delegated to separate bodies.
The employment tribunal accepted that the claimants’ could compare themselves with the depot workers. Under EU law, the difference in pay could be attributed to a ‘single source’, in this case Asda’s Executive Board who exercised budgetary control over both the retail and distribution operations and therefore had the power to introduce pay equality.
The tribunal also said that the claimants’ terms were broadly similar to those of the depot employees and met the requirement under the Equality Act 2010 for ‘common terms’.
This case is the UK's largest ever private sector equal pay claim, involving women who felt they were paid less despite doing the same amount of work and the decision could amount to an estimated value of over £100m (for Asda).
This is not the end of the case by all means and there are other matters to be determined ( is it equal work of equal value between the two set of compared workers?) however it could end up having far-reaching consequences for all the other retailers who have very same/similar organisational structures and pay divisions.
Asda continues to strongly dispute the claim against them.
What lessons can employers learn from this case?
To avoid any very likely negative publicity, and/or costly claims, companies should review and have proactive plans to address any pay gap issues before information needs to be taken in April 2017.
Are you ready?
#Beaware #Beready seek advice.