Yes, confirmed the Court of Appeal in the case of Asda Stores Ltd v Brierley and others.

The legislation

In terms of the Equality Act 2010, to bring an equal pay claim an individual must be able to identify a more highly paid comparator of the opposite sex performing equal work at either:

  • The same establishment; or
  • A different establishment where ‘common terms’ apply, either generally or between the individual and their comparator.

The Asda claims

Over 7,000 mainly female Asda workers engaged in the retail part of the Asda’s operations sought equality in terms of pay with the predominantly male staff working in Asda’s offsite distribution depots. The roles involved different types of work, and were carried out at different locations.

A preliminary issue raised was whether the staff working in the stores could properly compare their terms with those applying to the staff in the distribution centres. If they couldn’t, the claims would not be able to proceed.

The Court of Appeal decision

The Court of Appeal decided that the question to be considered was whether a distribution worker would be employed on terms broadly similar to their existing terms if they were, hypothetically, asked to do their job in a retail store, no matter how unlikely that might be. The answer to that was yes. Therefore, the two classes of worker were found to have ‘common terms’ and the claim could proceed.

It seems that the decision to go with the hypothetical test was in no small part down to the fact that this is the most efficient way for tribunals to approach the task. Otherwise, judges would be faced with the laborious task of analysing and comparing the actual terms applicable to each group of workers before deciding whether there is sufficient commonality between those terms for a comparison to be drawn between the workers (as the tribunal did in the earlier proceedings).

The decision was reached on the basis of domestic law provisions without looking at EU law, in particular the ‘single source’ test. However, the Court did comment that the employment judge in earlier tribunal proceedings had been right to decide that both groups of workers derived their terms from a single source because it was within Asda’s ability to equalise those terms at board level.

What next?

This decision confirms that retail employees can compare themselves with offsite distribution staff for the purposes of an equal pay claim (although this point could still be appealed to the Supreme Court). The case has, however, still not yet considered the important issues of:

  • Whether or not the retail employees are engaged to do equal work to that of the distribution employees;
  • If they are, whether the difference in pay constitutes unlawful sex discrimination or whether Asda has a non-discriminatory justification for the difference – Asda previously indicated that it would argue that any pay differentials are justified by the existence of different market rates in different industry sectors.

These claims were raised in 2014: it’s clear that there is still some way to go. Other employers in the private sector dealing with equal pay issues will be watching developments with interest.