Asda Stores Ltd v Brierley & Ors [2021] UKSC 10

Female retail employees at Asda brought equal pay claims comparing their pay to predominantly male distribution depot workers. The Supreme Court held they could use depot workers as comparators despite working at different establishments, as the 'common terms' requirement was satisfied through the North hypothetical test. This clarifies the threshold for cross-establishment comparisons in equal pay claims.

Facts

Asda Stores Ltd operates retail stores and distribution depots as separate establishments. The claimants, predominantly female retail employees (approximately 35,000 at the time of appeal), brought equal pay claims seeking to compare their pay with predominantly male distribution depot employees. Retail employees were paid less than distribution employees and had different terms and conditions of employment. The terms for each group were determined through different processes: retail terms were set internally whilst distribution terms were negotiated through collective bargaining agreements with the GMB union.

Procedural History

The employment tribunal found in favour of the claimants on the preliminary issue of whether the distribution employees could be valid comparators. Asda appealed unsuccessfully to the Employment Appeal Tribunal and the Court of Appeal before appealing to the Supreme Court.

Issues

The central issue was whether the ‘common terms’ requirement under section 79(4) of the Equality Act 2010 (and previously section 1(6) of the Equal Pay Act 1970) was satisfied, enabling the retail employees to use distribution employees as comparators despite working at different establishments.

Judgment

The Supreme Court unanimously dismissed Asda’s appeal. Lady Arden delivered the judgment, with which Lord Reed, Lord Hodge, Lord Lloyd-Jones and Lord Leggatt agreed.

The Common Terms Requirement

Lady Arden explained that the common terms requirement has a limited, threshold function:

The test is designed to provide a fail-safe to the employer that a case will not proceed if it relies on a comparison which can clearly be shown at the outset to be one that cannot realistically be made. Thus, the limited function of the threshold test is to weed out comparators who cannot be used because the differences between them and the claimants are based on geographical factors, and possibly also historical factors.

The North Hypothetical

The Court applied the ‘North hypothetical’ from Dumfries and Galloway Council v North [2013] ICR 993, which asks whether comparators would be employed on substantially the same terms if hypothetically employed at the claimants’ establishment. Lady Arden stated:

For this purpose, as regards location, it must be assumed that the comparators would continue to perform their existing role and that they would do so on an appropriate part of the claimants’ establishment. It would be wrong to assume some change in the way they discharge their role, so they should be assumed to work in separate premises if that is what their work requires.

The employment tribunal had found that distribution employees would have been employed on substantially the same terms if located at retail stores, reasoning that it was inherently unlikely depot workers would accept retail terms. The Supreme Court upheld this finding.

Rejection of Asda’s Arguments

Lady Arden rejected Asda’s argument that different employment regimes precluded common terms:

It would be surprising if equal pay claims could be stopped in limine simply because the comparators were employees of predominantly one sex who were located in a separate establishment and had had the benefit of a collective bargaining agreement, negotiated on behalf of that particular group of employees alone.

Implications

The judgment provides important guidance on equal pay litigation:

• The common terms requirement is merely a threshold test and should not become a major hurdle
• Employment tribunals should not permit prolonged enquiries into this preliminary issue
• Line-by-line comparison of different terms is not required
• The test can often be resolved by inference from relevant facts rather than witness opinions

Lady Arden emphasised the continuing importance of equal pay legislation in light of the Equality Act 2010’s positive duties on employers, stating that courts should apply the provisions ‘with confidence and unswervingly according to their terms, with Parliament’s purpose clearly in mind.’

The decision does not determine whether the claimants’ equal pay claims ultimately succeed; they must still demonstrate work of equal value, and Asda may raise material factor defences.

Verdict: Appeal dismissed. The Supreme Court held that the common terms requirement was satisfied through the North hypothetical, permitting retail employees to use distribution depot employees as comparators in their equal pay claims.

Source: Asda Stores Ltd v Brierley & Ors [2021] UKSC 10