Asda Stores Ltd v Brierley & Ors

The Court of Appeal dismissed Asda's appeal and held that large numbers of store employees could lawfully compare themselves, for equal pay purposes, with employees working in Asda's distribution depots. The court construed the Equal Pay Act 1970 (section 1(6)) and the equivalent provisions of the Equality Act 2010 (notably sections 65 and 79) as permitting cross-establishment comparisons where common terms and conditions apply for the relevant classes of employee irrespective of the particular site (the so-called North hypothetical). The court held that the re-drafting in the 2010 Act — the parenthetical phrase "as between A and B" in section 79(4)(c) — did not effect any substantive change to that test.

The court also held that, on the facts, Asda's terms for retail staff and for distribution staff were applied on a common basis across the employer's establishments so that the threshold for cross-establishment comparison was satisfied. It further concluded that the Claimants' position was supported by EU law concepts of "single source" under article 157 TFEU, but that the domestic construction alone sufficed to permit comparison.

Background and parties: About 30,000 claimants (mostly women) employed in Asda supermarkets brought equal pay claims seeking comparison with male employees working in Asda's distribution depots. The claims were principally advanced under the Equality Act 2010 but some claims concerned periods under the Equal Pay Act 1970. The preliminary issue decided on this appeal was whether the claimants could compare themselves with distribution employees at all.

Procedural history: The Employment Tribunal in Manchester (Employment Judge Ryan) decided the preliminary question in favour of the claimants (reasons sent 14 October 2016). Kerr J in the Employment Appeal Tribunal upheld that decision (judgment 31 August 2017). Asda appealed to the Court of Appeal which heard the appeal and dismissed it on 31 January 2019.

Legal issues framed:

• Whether the claimants could make cross-establishment comparisons under domestic law: Equal Pay Act 1970 section 1(6) and Equality Act 2010 sections 65 and 79(2)–(4), specifically whether "common terms" applied between stores and depots (either "generally" or for the "relevant classes").
• Whether the 2010 Act's re-drafting (the parenthetical "as between A and B" in s.79(4)(c)) changed the law.
• Whether EU law (article 157 TFEU and the Court of Justice authority on "single source") independently permitted comparison and whether article 157 has direct effect for equal value claims.

Court's reasoning: The court reviewed the authorities (notably Leverton, Smith and North) and summarised the correct approach: the statutory inquiry asks whether common terms apply at the claimant's and comparator's establishments irrespective of the particular employees actually employed at each site. It is a vertical comparison of terms as applied to the relevant classes, and it is sufficient that terms be "broadly" common. The court rejected the argument that the 2010 Act wording replaced that vertical test with a horizontal, individual-to-individual comparison. On the facts the tribunal's finding that Asda applied common retail terms to retail employees and common distribution terms to distribution employees across establishments was sustainable; the "North hypothetical" (would distribution terms apply if a distribution worker did distribution work at a store?) was satisfied. The court also accepted that, in the ordinary case, employment by the same employer will be a "single source" for purposes of EU law and that this provided an additional reason to allow cross-establishment comparison, while leaving the difficult question whether article 157 has direct effect in equal value claims undecided and noting it was not necessary to decide it on the appeal.

Relief sought and outcome: The claimants sought permission to compare with depot employees for equal pay remedies. The appeal was dismissed and the tribunal and EAT decisions upholding cross-establishment comparison were affirmed.

The appeal is dismissed. The Court of Appeal held that, as a matter of domestic law (Equal Pay Act 1970 s.1(6) and Equality Act 2010 ss.65 and 79), a claimant may compare with employees at other establishments where common terms and conditions apply for the relevant classes irrespective of where they work (the North hypothetical). The re-drafting in the 2010 Act did not change that test. On the facts Asda applied common retail and common distribution terms across its establishments so cross-establishment comparison was permitted; the "single source" principle under EU law provided an additional reason to allow comparison, but the court did not resolve finally whether article 157 has direct effect for equal value claims.

Appeal from the Employment Appeal Tribunal (Kerr J) judgment dated 31 August 2017, which upheld the Employment Tribunal (Employment Judge Ryan) decision (reasons sent 14 October 2016) that claimants could compare with depot employees. The Court of Appeal ([2019] EWCA Civ 44) dismissed Asda's appeal.