Equal pay for equal work: different gender, different job, different pay?

4 September, 2017
by: Cripps Pemberton Greenish

Do not make the mistake of assuming that men and women carrying out different jobs are not entitled to equal pay.

You can almost see how it happens.

You have staff, let’s just say, working in the distribution centers of a major supermarket chain that earn X, whilst you have other staff employed to work in the retail/public-facing part of your business who receive less than X.

How can employers address pay imbalance

As an employer you mistakenly feel there are no issues with this as the roles appear substantially different. However, on closer inspection it becomes apparent that the majority of employees carrying out the less well payed job are female, and as a result you find yourself the subject of an ‘equal pay’ claim…. or more accurately in the case Asda an ‘equal pay’ claim from north of 7,000 current and former employees.

The EAT has dismissed Asda’s appeal and upheld the Employment Tribunal’s decision that female employees working in the company’s retail sites (of which there are around 630 across the country) can compare their work to that of the higher paid male employees that work in Asda’s 24 distribution centers.

Gender Pay Reporting – what employers need to know

The crucial factors considered in this matter were:

  • Is there a ‘single source’? The question is not whether the different groups of employees work for a single employer or even associated employers, rather it is whether the employees’ terms and conditions are governed by a ‘single source’ (i.e. a single body) which is responsible for, and has the ability to rectify, the alleged inequality. In this instance Asda’s Executive Board was found to be such a ‘single source.’
  • Did the employees have common terms? Although there were differences between the terms, broadly the terms of employment were the same (same employer and similar handbooks etc.) and supported a comparison between retail and distribution.
  • Was the work undertaken by the two parts of the workforce of ‘equal value’? The EAT agreed with the Employment Tribunal that the work of the two sections of the workforce was equal and, therefore, the pay of the women in the retail sectors should be comparable with the men in distribution.

The repercussions of the EAT’s decision for Asda are substantial (reportedly an estimated cost of up to £100m) and Asda has indicated it might continue its challenge to the Court of Appeal.

As an employer it is important to avoid falling into the trap of not considering the type of work and pay across different divisions. Please get in touch if you have any queries regarding equal pay.