Asda Stores Ltd v Brierley & Ors

For cross-establishment equal pay claims, the statutory gateway asks whether common terms apply at the establishments, generally or for relevant classes. The comparison is between terms for the same classes at each establishment, not between the claimant’s and comparator’s actual contracts. Broad commonality suffices; terms need not be identical, and no employee in the comparator’s class need actually work at the claimant’s establishment. The hypothetical asks what terms would apply to the relevant worker doing the same job there. It does not require a realistic relocation scenario. The wording change in section 79(4)(c) did not alter that law. In the ordinary case, the same employer is a single source of pay terms under EU law, but the Court declined to decide whether Article 157 has direct effect for equal-value claims.

About 30,000 mostly female store employees claimed equal pay by comparison with male employees working at distribution centres. The Employment Tribunal held that the comparisons were permissible. Kerr J in the Employment Appeal Tribunal upheld that decision. Asda appealed on the domestic common-terms requirement, the EU single-source principle, the effect of the wording of the Equality Act 2010, and the direct effect of Article 157 for equal-value work. The central issue was whether store employees could compare themselves with distribution employees at separate establishments.

Appeal dismissed unanimously. Under section 79(4)(c) of the Equality Act 2010, and section 1(6) of the Equal Pay Act 1970 for the earlier period, the claimants were entitled to compare themselves with distribution employees.

1. The common-terms gateway concerns the terms applying at the two establishments, either generally or for the relevant classes. The comparison is vertical: the tribunal compares the terms applying to the same class at each establishment. It does not compare the actual contracts of the claimant and comparator. Broad commonality is sufficient; complete identity of terms is unnecessary. [1989] AC 706, [1996] ICR 515 and [2013] UKSC 45 were applied.
2. Actual employment of a member of the comparator’s class at the claimant’s establishment is unnecessary. The relevant hypothetical asks whether the class’s terms would apply if the employee did the same job at the other establishment. It does not require a detailed or adjusted scenario explaining how the transfer might occur. Collective agreements are the paradigm example, but imposed terms or factual uniformity may also suffice.
3. The Employment Tribunal wrongly compared retail and distribution terms as a whole and thereby conducted the wrong exercise. That error did not invalidate its conclusion because it separately considered the relevant hypothetical and reached a conclusion open to it on the evidence. The managers’ evidence about what would happen in an unrealistic scenario was not dispositive.
4. The change from “for employees of the relevant classes” in section 1(6) of the Equal Pay Act 1970 to “as between A and B” in section 79(4)(c) of the Equality Act 2010 made no substantive change. The provision was construed in context and, if necessary, an amending construction under [2000] UKHL 15 would have been justified.
5. As an additional reason, the claimants’ terms had a single source for EU-law purposes because Asda, subject to Wal-Mart’s oversight, had power to equalise them. Internal delegation of pay-setting within a company did not create separate sources. [2003] ICR 1092 and [2005] EWCA Civ 138 were considered in that analysis.
6. The Court declined to decide whether the equal-value limb of Article 157 of the Treaty on the Functioning of the European Union has direct effect where the work is different and has not been rated equivalent. The issue was not acte clair, but it was non-determinative, so no reference was made.

1. Court of Appeal (Civil Division): In [2019] EWCA Civ 44 , dismissed Asda’s appeal and upheld the claimants’ entitlement to make the cross-establishment comparisons.
2. Employment Appeal Tribunal: Kerr J upheld the Employment Tribunal’s decision in a judgment handed down on 31 August 2017.
3. Employment Tribunal: After a six-day preliminary hearing in June 2016, Employment Judge Ryan decided the comparison issue in the claimants’ favour. The judgment and reasons were sent to the parties on 14 October 2016.