By: Harry Price
Asda is currently embroiled in a decade-long legal battle which could lead to them being on the hook for a payout of up to £1.2 billion.
The case has been brought on behalf of up to 60,000 workers, mostly women who are employed in shop-based roles, seeking compensation based on the fact that they have been paid less than a valid comparator for the same work. They are using warehouse roles at Asda’s distribution depots, which are predominantly men, as the comparator.
The case has already been heard by a Manchester employment tribunal, the Employment Appeal Tribunal, and the Court of Appeals, all of which ruled in favour of the women. The case has now reached the Supreme Court. The main question at issue is whether common terms apply between the claimants’ and comparator’s establishments, satisfying the common terms requirement in the equal pay legislation.
It is important in this case to know the difference between equal pay for equal work lawsuits and equal pay for work of equal value lawsuits. In the former, lawsuits are based on the existence of wage discrimination between two groups who hold the exact same role. For example, cashiers that are men compared to cashiers that are women. Whereas equal pay for work of equal value lawsuits are based on the existence of wage discrimination between two different roles that are alleged to be based on a factor other than the intrinsic value of the work done. For example, if nurses were being paid less than electricians in the same company because nurses are predominantly women and electricians are predominantly men.
An additional point of complexity is that this is the first case of its kind where the salaries of the two comparison groups are not based on collective bargaining agreements. This means that neither the shop floor workers nor the warehouse roles have a union agreement with their employer, which in this case is Asda.
In a unanimous decision, the Supreme Court has ruled against Asda’s appeal. Notably, Lady Arden pointed out that this did not mean that the claimants’ claims for equal pay have succeeded, merely that the case would not be dismissed.
In the ruling, checkout operators and shop-floor assistants working in categories such as bakery, chilled goods, produce, customer services, and the George clothing departments were all deemed to be of equivalent value to warehouse operators. However, online shopping packers and shop-floor workers in the packaged and canned goods categories were found to not be equivalent. The two excluded positions are thought to account for about 11,000 of the 60,000 claimants.
This raises the question: how did the judges come to this decision, and what does it mean for two jobs to be of “equal value”?
In order to reach such a determination, rival experts were hired; judges compared the relative pitfalls of dealing with muttering customers or impatient lorry drivers; precise timings were calculated; and points were awarded for knowledge, communication, and “emotional demands”. Additionally, enough job descriptions were provided to the judges that the length of the documents was three times longer than the complete works of Shakespeare.
Historically, equal pay for equal work lawsuits have been much more common due to the very clear nature of the discrimination, but equal pay for work of equal value suits have been much rarer due to the nature of the rulings required and, as such, were more time-consuming and costly.
However, this began to change following a European Court of Justice ruling in 1999 that allowed claimants to claim back pay for six years instead of two. This ruling combined with the loosening of rules around “no win no fee” lawyers in the UK allowed “equal value” cases to not only become financially viable but also potentially lucrative. As such, claims of this nature exploded, with 50,000 new cases in 2007-2008 compared to only 3,000 in 2003-2004.
Interestingly, the cases themselves do not hinge on proving any actual sexism. In a very similar ruling against Next (a clothing chain), it was found that “there was no conscious or subconscious gender influence in the way Next set pay rates,” and women made up 47% of Next’s warehouse employees. This means that, despite cases being based on potential discriminatory practices, businesses can still face substantial payouts (Next may have to pay more than £30m) without being found guilty of any discrimination, either directly or indirectly.
These cases also increase costs for businesses that aren’t involved in any legal proceedings. In order to protect themselves from large payouts attributed to cases of this type, organisations are now paying millions to consultants that create “job evaluation schemes”. This means they can more easily explain the different salaries for different roles, which lowers their exposure to legal action.
Therefore, these cases appear to place significant power in the hands of judges and courts to determine the value of employees’ labour, superseding the power of the invisible hand of the free market that typically determines pay. While these lawsuits may benefit employees who suffer from more subtle discriminatory practices, the outcomes often raise difficult questions. Is it justifiable that a judge can decide the value of a job? Why would a shop-floor assistant in the bakery aisle be deemed more valuable than one in the packaged goods aisle? These are questions that will require careful consideration as cases of this kind become more prevalent.
The views expressed in this article are the author’s own, and may not reflect the opinions of The St Andrews Economist.
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