Asda Lawsuit

What has just happened?

The recent Supreme Court ruling has found that the 44,000 female Asda employees can compare their roles to the pay of the mostly male staff employed at depots’. [1] This ruling is a positive one for the female employees who are battling long standing discrimination and equal pay lawsuit against the retail giant.

What does this mean?

The case has been labelled as ‘Made in Dagenham for the 21st century' making reference to the equal pay strikes in the 1960’s. [2]

Analysis has shown that the pay difference for store and distribution workers can range between £1.50 to £3 an hour. The yearly disparity total can reach many thousands of pounds. 

This ruling is not a definitive win for the 44,000 Asda workers. Instead, it can be described as more as a cleared hurdle in the fight for equality in the workplace. If the workers wish to carry on the lawsuit, the next hurdle will be proving in court that the work completed by the women is of equal value with regard to the training and necessary skills to those in the warehouses.

 Asda, as the defendant, will have to demonstrate and explain the genuine reason why, unrelated to sex, why men and women are paid differently.[3] Furthermore, Asda will have to successfully argue a ‘material factor defence’. In which geographical location, different working hours, length of service, or different skills, qualifications and experience, are the reason for the disparity in pay. If the ‘material factor defence’ in unpersuasive in court, then the claimants they could be in line for £10,000 to £20,000 in compensation.

The cost of compensation will be a massive blow to the Billionaire Issa brother, who completed their £6.8billion takeover from Walmart. As a result, Leigh Day, the representatives of the Asda workers, are confident that Asda will choose to settle rather than continue the lawsuit.

What will this mean for the legal sector?

The ruling is likely to cause a ‘watershed moment’ for other retail giants who have similar operations and pay structures to Asda. There has been a growing movement amongst workers called ‘EqualPayNow’ which looks to shine a light on the pay discrimination within retail work.

Lady Arden made stern comments in her judgement of the Asda case highlighting the role of the Equal Pay Act in removing pay discrimination.[4] As well as stating that the case was “important because otherwise an employer could avoid equal pay claims by allocating certain groups of employees to separate sites so that they can have different terms even where this is discriminatory”. [5]

Although there has been no substantive law change and the actions of Asda have yet to be judged on merit. There will be metaphorical shock waves sent through inhouse departments and employment law specialists as they are called to advise on employment contracts. Especially as it is has been estimated that a successful tribunal case could result in £8bn worth of unequal pay claims.[6]

Retail businesses will look to evaluate their ‘material factor defence’ claims in order to assess their validity and persuasiveness. Lawyers may recommend appointing an external assessor, as this is similar to the process of the Employment tribunal. The assessor will be able to give impartial judgments on the validity and merits of the ‘material factor defence’.

The increased profits of many large retailers will not be looked on favourably by workers, shoppers and the claimants legal team. In the Christmas Period 2020 only, Sainsbury’s reported a 9.3% rise in sales and Morrison’s achieving an 8.5% rise.

Throughout the pandemic, shop workers are the key workers of the nation putting themselves at increased risk of contracting COVID-19. The unfavourable treatment which they have received is unfair exploitation of their work. The retail giant’s exploitation of workers should be at the foreground of national discussions and it is likely that the ‘EqualPayNow’ movement will only grow.

Assessing Firms:

#Shoosmiths #LeighDay #TaylorEmmet #DLAPiper #PaulHastings#Willans

References

[1] Jane Croft, ‘Asda workers win first round of equal pay lawsuit’ (Financial Times, 26 March 2021) https://www.ft.com/content/db023ca7-d9a7-4912-8f5e-ca64aeaa4bf7 accessed on 28th March

[2] Francesca Washtell ‘Women celebrate victory in Asda equal pay bid: 'Made in Dagenham' case paves way for shop workers to earn same as male warehouse staff’ (This is Money, 26 March 2021) https://www.thisismoney.co.uk/money/markets/article-9407509/Women-celebrate-victory-Asda-equal-pay-bid.html accessed on 26 March 2021

[3] Emma Satyamurt, ‘WHAT DOES THE ASDA SUPREME COURT RULING MEAN FOR STAFF AT OTHER SUPERMARKETS?’ (EqualPayNow, 26 March 2021) https://www.equalpaynow.co.uk/2021/03/26/what-does-the-asda-supreme-court-ruling-mean-for-staff-at-other-supermarkets/ accessed on 28 March 2021

[4] Equal Pay Act 1970

[5] Asda Stores Ltd (Appellant) v Brierley and others (Respondents)[2019] EWCA Civ 44

[6] Francis Churchill, ‘Asda equal pay ruling could have ‘costly implications’ for other employers, experts warn’ (People Management, 27 March 2021) https://www.peoplemanagement.co.uk/news/asda-equal-pay-ruling-could-have-costly-implications-other-employers-experts-warn#gref accessed on 28 March 2021