This week Asda has been brought before the Employment Tribunal over an equal pay claim by its workers, thought to become a landmark case for the industry that could potentially cost the supermarket giant billions.

It is the latest retailer to face legal proceedings over an equal pay claim after clothing giant Next was last month forced to pay £30m after a tribunal rejected its argument that it paid its predominately male warehouse operatives more than its female-heavy sales consultants because the market rate was more competitive.

We break down Asda’s case to find out why it is going to court, the stages of the claim and the implications if the supermarket loses its case.

Earlier this week, (9 September) dozens of Asda workers staged demonstrations outside TUC Congress in Brighton and Manchester, where the supermarket’s gender-equal pay case will be heard.

It marks the second stage of a landmark court case set to impact over 69,345 employees represented by the GMB union and law firm Leigh Day.

It follows Leigh Day launching an equal pay case against Asda in 2014, which at the time only represented 400 workers, before pursuing similar claims against fellow grocers Sainsbury’s, Morrisons, Tesco and Co-op, as well as Next.

Asda is expected to explain why it pays its predominantly female retail workforce up to £3.74 an hour less than its warehouse workers, who are mainly male, while the union is to argue that the work is of equal value to Asda, and therefore unlawful according to the Equality Act.

Stage Two of the case will compare a variety of roles, including shopfloor and warehouse jobs.

The tribunal is set to compare multiple roles including checkout operators, shop floor staff and customer service desk in retail, to depots jobs, such as high reach truck operators and those who work in a chilled/frozen environment.

Asda may try and take a similar approach to fellow retailer Next, which argued at its hearing in May this year that it was not a case of gender discrimination, but instead that the market rate for a warehouse operative was more competitive than for a sales consultant.

However, Next’s argument was ultimately not successful and the Tribunal ruled that it was not valid defence for two labour markets doing equal work, simply because of the difference in market rate.

It is the first of the supermarkets to be taken to court over equal pay, with similar claims also been brought against Tesco, Sainsbury’s, Morrisons and Co-op, on behalf of over 112,000 staff.

Stage Two – Equal Value

Stage Three – Material Factors Defence

The entirety of an employment group equal pay claim can take several years, due to the several stages, which can be appealed by either party. However, some stages can be conceded by employers, often if similar claims have already been successful in making the same arguments.

The GMB union has said the ruling may lead to the supermarket giant shelling out “billions” to its workers.

Claimants can continue to accrue compensation from the point at which they sign up to a claim for as long as they continue to work for the company. If the claimants have their pay equalised going forward, they will also be able to claim up to six years of back pay from the point their claim was submitted.

Retailer Next’s verdict cost it £30m, however it’s case only impacted 3,500 workers – seventeen times less than the number of employees involved in the Asda case.

Asda workers stage a demonstration marking the beginning of the Stage Two September hearing

Leigh Day has said the outcome against supermarkets Asda, Tesco, Sainsbury’s, Morrisons and Co-op, will be “decided on its own particular facts”, however the law firm said it was “very hopeful” and added that it expects “the success of the Next staff will be a huge encouragement to all these cases”.

Leigh Day partner Lauren Lougheed said: “The equal pay team at Leigh Day is very encouraged by the huge success we experienced just last week on behalf of the many thousands of women we represent who have been fighting for equal pay at Next.

“If our clients win at this stage 3 hearing, Asda will then have to prove that there is a genuine reason for the pay difference between store workers and warehouse workers which is not based on sex. Next bosses failed to do this, and our clients won. We are confident that the same will be true in the Asda claim and also in the other equal pay claims we are bringing on behalf of many thousands of other supermarket store workers.”

GMB national officer Nadine Houghton said that “Asda workers are making history” and added that the the result of the hearing will “call time on the retailers undervaluing their predominantly women shop floor workers”.

“The entire retail sector has been built on the structural undervaluing of women’s work but GMB members are changing this,” said Houghton.

An Asda spokesperson added: “We fully respect the right of current and former colleagues to bring this case, however, we strongly reject any claim that Asda’s pay rates are influenced by gender.

“There are numerous different jobs within retail and within warehouses. We continue to defend these claims because retail and distribution are two different industry sectors that have their own distinct skill sets and pay structures.”

Fellow retailers, Co-op, Morrisons, Tesco and Sainsbury’s are also facing equal pay claims

Tesco

Leigh Day launched a £4bn equal pay claim against Tesco in July 2018, currently representing 15,743 workers.

Sainsbury’s

Leigh Day launched its claim against Sainsbury’s in July 2015, which is currently on behalf of 11,884 employees. The difference in hourly pay for its shop floor workers and those in a distribution centre can range between £1.50 to £4 an hour.

Morrisons

The law firm launched an equal pay claim against the grocer in November 2018, currently representing 7,520 workers.

Co-op

Leigh Day launched its equal pay claim against Co-op in January 2020, which is currently on behalf of 4,775 workers.

Leigh Day partner and barrister Elizabeth George said the outcome of the equal pay claims could mark a landmark change in the retail industry.

“When you have female dominated jobs being paid less than male dominated jobs and the work is equal, employers cannot pay women less simply by pointing to the market and saying – it is the going rate for the jobs,” said George. “The Employment Tribunal has confirmed employers must go further to justify paying the different rates.”

Law firm Shakespeare Martineau employment partner Jon Heuvel agreed, adding that the latest series of employment pay claims are set to bring a “sharp focus” to employer policies on pay across different roles and could risk a retailer’s reputation as a “fair employer” if not addressed.

“It is vital for companies to ensure their internal pay structure is regularly reviewed, and that employee concerns are met with transparent and timely communication. Where this is not properly enforced, businesses risk legal disputes which ultimately can impact staff retention and their reputation as a fair employer,” he said.

“The decision in the case of Asda could open the floodgates to more cases of this nature, and employers should put equal pay at the top of the agenda now to ensure they are not caught by surprise.”

The grocery industry will be waiting tentatively to see the outcome of Asda’s case. If successful, the verdict will likely set the tone for not only the upcoming rulings for fellow grocer retailers, but also the wider UK jobs market.