Equal pay claims: Is the private sector now in the firing line and what should it be doing about it?

29 Oct 2014

We have long been familiar with Equal Pay claims being brought in the Public sector but the focus now seems to be shifting towards the Private sector. Asda is currently facing Equal Pay claims from a large number of staff in relation to pay differentials between store and warehouse employees.

As many as 1,000 employees who work in Asda stores have reportedly joined the action with a further 19,000 apparently enquiring about the possibility of making such claims. They are claiming that the work that they undertake in the stores is of ‘equal value’ to the work undertaken in Asda’s warehouses. The warehouses are in the main staffed by men while the stores have a higher proportion of women in the workforce. The comparison between the work has been described in the following terms: ‘In the warehouses the staff take products off the shelves, put these products on pallets and then load the pallets on to lorries. In the stores, staff do the reverse: they take the pallets off the lorries, unstack them and put the products on the shelves.’ One possible response to the proposition that the work is of equal value might be that the warehouse roles are different because of the uncomfortable conditions, additional skills required and unsocial working hours involved.

The pay differential between the stores and warehouses is as much as £4 per hour. If the work is shown to be of equal value then current female staff will be able to claim up to 6 years back pay.

Male store staff will also able to claim the difference, through a process known as ‘piggybacking’, where, because the women in the store roles are now entitled to equal pay with their male warehouse counterparts, the men in the stores are entitled to that pay as well, in order to ensure they are on an equal footing with the female store workers.

Staff who left stores within the last six years may also be able to claim through the civil courts rather than being restricted by the six month time limit for an Equal Pay claim in the employment tribunals.

The claims, if successful, would therefore result in a sizeable financial liability for Asda.

The claims are the highest profile example of Equal Pay claims being brought against an employer in the Private sector, as opposed to one in the Public sector. An increase in focus on the Private sector in relation to equal pay litigation was predicted following the passing of the Equality Act 2010, as claims were made somewhat easier to bring and it appeared that claimant law firms that had previously concentrated on the Public sector in relation to equal pay were beginning to turn their attention to the Private sector.

What might an employer do to protect itself?

We do not yet know whether the employees, or a group of them, will be successful in their claims in this case. Asda may be able to show that the work done by store staff is not of ‘equal value’ to that done be warehouse staff.

Even where men and women are found to be doing equal work then it remains possible to rely upon a ‘material factor’ defence, such as their performance, which justifies the difference in pay. Such a factor must not be discriminatory because of sex and may need to be objectively justified.

For employers concerned that male and female staff on different rates of pay may be doing equal work there are some options that can at least define and crystallise any issues – so that remedial action can be taken, or possibly even reduce the risks of claims.

Formal job evaluation schemes (JES) and less stringent equal pay audits can be useful tools for employers in two ways. First, the assessments highlight areas where an employer may be in breach of its Equal Pay obligations so that it may take remedial action. Secondly where a properly conducted JES has been carried out it will normally be an effective defence to any subsequent complaint by an employee that their work is of ‘equal value’ to a colleague.

It may be worth going to the cost and trouble of a JES where an employer is concerned about claims and it wishes to know the extent of its liability and to draw a line in the sand, or where it wishes to confirm the fairness of its current pay structures.

If you have concerns about equal pay or would like to know more about implementing a JES or equal pay audit in relation to your workforce then please contact:  

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