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Asda equal pay victory has "widespread repercussions" for HR

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As Asda workers win a landmark case over equal pay, legal experts warn HR to prepare for wider pay reporting obligations

Asda shop workers won a significant legal victory yesterday (31 January 2019), which found that they are entitled to the same pay as warehouse workers.

The Court of Appeal ruled that Asda’s mainly female, lower-paid store staff can compare themselves to higher-paid, mainly male, warehouse workers in equal pay claims.

Lawyers fighting on behalf of store staff called the ruling “a major step forward in the fair pay battle on behalf of tens of thousands of store workers”.

Asda had already lost an employment tribunal and employment appeal tribunal but had appealed against both rulings. It will now apply to the Supreme Court for permission to appeal further.

Leigh Day, which represents the workers, claims to also represent more than 30,000 shop floor staff from across the big four supermarkets – Asda, Sainsbury’s, Tesco and Morrisons – in similar pay cases. The total payout to workers if the supermarkets lose could be more than £8 billion, said Leigh Day. The Asda case is the furthest along of all the supermarket equal pay claims.

The 31 January victory, which established that the roles are comparable, is the first step in proving the shop workers’ claim that they should be paid the same as their distribution centre colleagues because their work is of equal value. The staff must now prove the roles are indeed of equal value and establish whether there is a reason other than gender discrimination for the roles not being paid equally.

Commenting on the news, Neil Tonks, legislation manager at MHR, said that the ruling could have wider implications for other retailers, as the role of shop floor staff will have to be examined in more detail.

“Today’s ruling is a landmark decision and could have widespread repercussions for the retail industry if it eventually leads to shop floor employees working in stores being paid and valued the same as people working in their distribution centres,” he said.

“The decision is particularly interesting given the very different day-to-day tasks that the two groups of employees perform, and shows that the courts are prepared to allow the net to be cast quite widely when looking for a comparator in equal pay claims.”

However, he added that workers would still need to show that there is a discriminatory reason behind unequal pay: “This decision is far from the end of the story though, as the workers still have to show that the roles are actually of equal value and that there isn’t a non-discriminatory reason for them to be paid differently. This case looks set to rumble on for some time yet.”

Dean Forbes, CEO at CoreHR, added that HR must look at workers’ skillsets to avoid similar instances arising.

“This case hammers home the reality that there are no easy answers to ensuring equal pay across complex organisations. The changing nature of work, coupled with evolving legislation, means HR and management must evaluate workers with vastly different experience and skillsets,” he said.

“That’s a difficult task for any organisation, but for those with a workforce in the thousands it is simply not possible without the help of technology and data analytics. Truly understanding your organisation through data will highlight troubling statistics. If the average female employee is earning less than the average male employee there is likely something to be done.”

HR must analyse pay differences beyond gender, Forbes said: “Research shows pay inequalities persist across numerous areas; from ethnicity and class to religion and disability. The data HR collates can and should introduce a framework for change – weaving equality across every aspect of the business.”

He added that with gender pay gap reporting still in its infancy, HR should prepare for pay reporting to be rolled out in other areas in the future.

“We’re still in the early stages of new gender pay gap reporting laws, but initial knock-on effects are promising, and more change is on the horizon. New regulations around C-suite versus employee pay gaps are coming, so having the right technologies that guide management to useful metrics will become an imperative,” he said.

“Every organisation must recognise they won’t be able to attract and retain talented employees as equality becomes an expectation."