Over 7,000, predominantly female, retail employees brought equal pay claims to the Employment Tribunal.   The claim was on the basis that those workers in the distribution centres, who were predominantly male, received a greater rate of pay.  The distribution centres are in different areas to the retail stores.  The appeal to the Supreme Court was on the basis of a preliminary hearing to determine whether the comparison between retail and distribution staff fell in line with Article 157 of the Treaty on the Functioning of the European Union and how that had been brought into domestic law through the Equalities Act 2010 in England and Wales.

The Tribunal found that there was a ‘single source’ of terms and conditions - that being the fact that the Executive Board of the respondent exercised oversight over distribution and retail.  To this end, there were general terms between the claimants and the comparators in distribution.  Asda were unsuccessful with their appeals to the EAT and the Court of Appeal with it culminating in this appeal to the Supreme Court.

Lady Arden affirmed that the position to be taken when there were no employees of the comparator’s group at the claimant’s site then a hypothetical should be taken.  The hypothetical comes from Dumfries & Galloway Council v North.   The basis of the ‘North Hypothetical’ is asking whether the comparators would have been employed on similar terms to those they are on if they were being employed at the site where the claimants’ worked. To put this simply, the question is whether the distribution workers would have the same terms if they were being employed at the retail establishment.  Lady Arden went further in her judgment stating that in using the hypothetical the court did not need to determine whether it was feasible for the distribution workers to do their job at the claimants’ site.  The Supreme Court outlined that there was no need to look at the ‘single source’ EU test as the ‘North Hypothetical’ is capable of providing an answer in the case.  Therefore, in the application of the ‘North Hypothetical’ it did operate and the distribution workers would have been employed on the same basis had they been at a distribution site aside a retail site.  Interestingly, Lady Arden expressly pointed out that this was only the preliminary issue, and it would still be for the claimants to prove that their work was of equal value.

Practical Lessons

This case is likely to continue rumble-on considering the financial ramifications it could have for all involved.  The Supreme Court judgment is significant in that it demonstrates the wide use of the ‘North Hypothetical’ for determining whether the equal pay provisions come into play.  However, it is important to note that this decision offers very little by way remedy or relief considering that the claimants will have to go back to the Employment Tribunal and demonstrate their work was equal and this will be subject to the defences that could be offered by Asda.  Watch this space.
https://www.supremecourt.uk/cases/uksc-2019-0039.html