It was back in the 1970s when equal pay legislation was introduced, and it is 12 years since the regulations were rebranded within the Equality Act 2010. So how far have we come in the quest for equal pay? If you are a female store-based supermarket worker, not far, it would seem.

However, last month a chink of light was provided for more than 1,600 female Co-op workers who cleared the ‘first hurdle’ in their equal pay claim against their employer.

Case background

The broad issue in this case arises from the disparity of pay between Co-op’s shop-floor workers, predominantly women, and their distribution centre colleagues, most of whom are men. While the roles of the distribution staff are traditionally more physical and sometimes more difficult to recruit for, the store workers have a number of front-of-house and customer-facing duties which include dealing with cash, lifting, packing and re-stocking.

The pay disparity means that shop-floor workers may be making between £1.50 to £3.00 less per hour compared with their distribution centre colleagues.

How can the workers succeed?

Within the Equality Act 2010, section 66(1) creates a ‘sex equality clause’. The effect of which being that:

  • any term of a person’s contract which is less favourable than that of an appropriate comparator is modified so as to be not less favourable;
  • where a person’s contract does not have a term which corresponds to a beneficial term in a contract of an appropriate comparator, the person’s contract is modified so as to include such a term; and
  • where the employer does not seek, or fails, to establish that the difference between the person’s contract and that of the comparator is genuinely due to a material factor which is not the difference of sex and which is not indirectly discriminatory and cannot be justified.

Accordingly, to win an equal pay claim in the UK the claimant must show that they are underpaid in comparison to a real, appropriate comparator when undertaking ‘equal work’, that is to say, work that is ‘like work’, ‘work rated as equivalent’ or ‘work of equal value’. If that is established, it is then for the employer to show both that the difference in treatment is not the difference in sex and, if the factor that is causing the difference in pay puts one sex at a particular disadvantage, that the factor is a proportionate means of achieving a legitimate aim. This is most commonly referred to a as ‘material factor’ defence.

Co-op concession

In the course of the proceedings, Co-op has now provided a comparability concession in that those on the shop-floor work in roles comparable to that of the distribution centre workers. So the store-based workers have surmounted the initial hurdle in the legal process.

Recent developments

The concession is unsurprising considering recent developments in other supermarket and retail cases.

We have seen a run of comparability decisions and concessions in the last year: both Sainsbury’s and Next made concessions regarding the comparability of their shop-floor and distribution-centre workers for equal pay purposes in 2021. In September, Morrisons store-based workers won a tribunal ruling in their favour on the issue.

The comparator concept was further tested in the Supreme Court last year in Asda Stores Ltd v Brierley and Others (some 35,000 others, in fact). This case focused on the issue of whether the shop-floor and warehouse staff were part of the same ‘establishment’, as Asda argued that a comparison was inappropriate due to the different terms and conditions of employment and geographical factors when they worked at separate sites. The court applied tests to consider whether the terms and conditions of employment of the comparators have ‘common’ or similar terms or whether a hypothetical assessment can be applied. The workers succeeded on this point.

Tesco shop-floor workers were also successful in seeking clarification from the Court of Justice of the European Union (CJEU) last year where they successfully demonstrated that EU laws support equal pay for equal work. This judgment focused on the ‘single source’ test in comparing the shop-floor workers with those in a different ‘establishment’ (the distribution centre). The judgment considered whether the ‘single source’ (the employer) has the power to address terms and conditions of employment to include pay disparity.

What next?

Recent developments in the Co-op case and others pretty much secure the comparability hurdle for shop-floor retail workers. This is encouraging but there is still a long road ahead. The claimants now seek to tackle the thornier issue that they are performing work of equal value to the comparator. If successful at that stage it will be for the retail giants to present the ‘material factor’ defence. Following its recent concession, Co-op maintained that its shop-floor workers are paid fairly and that there are justifiable differences in the roles, skills, experience and demands for each group of workers which are unrelated to gender. So those issues will have to be played out before the courts.

There will be sleepless nights ahead for retail owners. If the workers are ultimately successful, the tribunal could order pay parity but also award back pay. This could run into thousands of pounds for each worker.

The nature of equal pay litigation unfortunately involves a long journey and we are unlikely to read the final chapter in this story for many years. Nevertheless, hundreds of thousands of retail workers will be following these developments with interest and the industry will be focused on a review of its pay structures to ensure their workers are rewarded equitably notwithstanding gender.

 

Caroline Oliver is a senior solicitor at Didlaw, London

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