If the comparator in an equal pay claim works at another location, the claimant has to show that they share “common terms”. In Asda Stores Ltd v Brierley and ors, the Supreme Court held that in order to decide whether they do, tribunals just have to ask whether the terms enjoyed by the claimants were substantially the same as those enjoyed by the comparators.
Basic facts
A group of around 35.000 mainly women claimants who work in Asda’s retail stores lodged tribunal claims for equal pay with comparators who were overwhelmingly men employed in the company’s distribution depots.
In their defence, Asda argued that the claims could not succeed because the two groups did not enjoy “common terms”. Firstly, the retail and distribution locations were separate from one another; and secondly, the employees in those locations had different terms and conditions of employment.
Relevant law
In order to bring an equal pay claim, claimants must be able to compare themselves with a valid comparator. If the comparator is based at another establishment, section 79(4)(c) of the Equality Act 2010 states that “common terms” must apply at both workplaces for the claim to succeed.
As parliament did not define what it meant by “common terms”, the Supreme Court in Dumfries and Galloway Council v North (LELR 330) said that tribunals have to ask whether the comparators would retain their existing terms and conditions if they were transferred to work in the claimants’ establishments. This question has become known as the North hypothetical.
Decisions of lower courts
In terms of answering that question, the tribunal found that the employees who worked in the distribution depots would have been employed on substantially the same terms if they had been employed at the claimants’ site, and they would not have received the retail employees’ terms. The EAT agreed.
Although it agreed with the decisions of the tribunal and the EAT, the Court of Appeal held that the tribunal should not have asked whether there were “common terms generally as between claimants and comparators”, but rather whether the terms enjoyed by the distribution employees were substantially the same at the depots as at the retail stores.
Supreme Court decision
Rejecting Asda’s appeal, the Supreme Court justices confirmed that the “threshold test” to be undertaken to determine whether claimants and comparators enjoy common terms is to ask whether the comparators would stay on broadly similar terms to their current workplace if they were transferred to do their present jobs in a different location, irrespective of how unlikely that eventuality might be.
The Court held that this approach would prevent equal pay claims from being stymied at the preliminary stage by an employer allocating groups of employees to different sites so that they have different terms, thereby ensuring that they could not be compared with one another.
The point of the test therefore was to “weed out” comparators where the differences between them and the claimants were based on geographical or possibly historical factors. As such, cases where the threshold test could not be met were likely to be exceptional.
In circumstances where no comparator worked at the claimants’ establishment, and it was not clear that the comparators’ terms could actually be applied to work at that establishment, employment tribunals would need to apply the North hypothetical. In other words, they would have to decide the issue on a hypothetical basis.
In relation to the future management of cases, the Supreme Court agreed with the Court of Appeal that tribunals should not engage in a prolonged enquiry in relation to the common terms’ requirement. Specifically, they should not carry out a line-by-line comparison of different sets of terms and conditions. Instead, they should ask whether the terms enjoyed by the claimants were substantially the same as those enjoyed by their comparators.
Comment
This is a useful clarification of the law. It should make equal pay claims under the Equality Act 2010 more straightforward. But employers are still likely to challenge comparisons between men and women in separate workplaces particularly where there is separate collective bargaining.