Asda Stores Ltd v Brierley and others

For a cross-establishment equal pay comparison, common terms exist where the comparators would retain the same or substantially the same terms if employed in their existing roles at the claimants’ establishment. The comparison concerns the comparators’ actual and hypothetical terms, not a line-by-line comparison between the claimants’ and comparators’ terms.

The common terms requirement is a limited threshold test. Its purpose is principally to exclude comparisons affected by genuine geographical, and possibly historical, differences. Where necessary, the tribunal must assume that the comparators can perform their existing roles in an appropriate part of the claimants’ establishment, even if co-location is unrealistic or infeasible.

Predominantly female retail employees brought equal pay claims against Asda Stores Ltd. They sought to compare their terms with those of predominantly male employees working at separate distribution depots. The employment tribunal determined as a preliminary issue that the distribution employees were valid comparators. The Employment Appeal Tribunal and the Court of Appeal, in [2019] EWCA Civ 44, upheld that result.

Asda appealed to the Supreme Court. The central issue was whether common terms applied at the separate establishments for the purposes of section 1(6) of the Equal Pay Act 1970 and section 79(4) of the Equality Act 2010. In particular, the Court considered whether the distribution employees would have retained substantially the same terms if hypothetically employed in their existing roles at the retail establishments.

1. Appeal dismissed unanimously. Lady Arden delivered the judgment, with which Lord Reed, Lord Hodge, Lord Lloyd-Jones and Lord Leggatt agreed. The employment tribunal was entitled to find that the distribution employees would have retained substantially the same terms if hypothetically employed at the retail establishments. The retail employees could therefore use them as comparators. This did not determine whether their work was of equal value or whether Asda had a genuine material factor defence.

2. The common terms requirement in section 1(6) of the Equal Pay Act 1970 and section 79(4) of the Equality Act 2010 requires a broad comparison between the comparators’ terms at their own establishment and the terms on which they are or would be employed at the claimants’ establishment. It does not require identity of terms or a comparison between the claimants’ terms and the comparators’ terms. Leverton, British Coal and North established a robust and purposive approach to this requirement.

3. Where no comparator works at the claimants’ establishment and it is unclear what terms would apply there, the tribunal must use the North hypothetical. It must assume that the comparators continue to perform their existing roles in an appropriate part of the claimants’ establishment. Neither a realistic possibility of transfer nor the feasibility of performing the role in the claimants’ immediate workplace is required. Separate suitable premises may be assumed where the work requires them.

4. The requirement is a limited threshold or fail-safe. Its function is principally to exclude comparators whose terms are genuinely different because of geographical, and possibly historical, factors. Different employment regimes, separate bargaining arrangements or physical separation do not by themselves defeat comparison. Cases failing this threshold are likely to be exceptional.

5. The employment tribunal had wrongly undertaken a detailed comparison of the retail and distribution employees’ respective terms. That error did not affect the result because the tribunal separately answered the North hypothetical correctly. An appellate court should not interfere with an employment tribunal’s factual findings on that issue where there has been no legal misdirection.

6. Future inquiries into common terms should be tightly managed. Tribunals should avoid line-by-line comparisons and prolonged evidence about hypothetical transfers. The requirement must not become a proxy for equal value or the genuine material factor defence.

1. United Kingdom Supreme Court: In [2021] UKSC 10, unanimously dismissed Asda’s appeal and upheld the determination that the distribution employees could be used as comparators.
2. Court of Appeal: In [2019] EWCA Civ 44, dismissed Asda’s appeal. It held that the tribunal had made the wrong direct comparison but had correctly determined the dispositive North hypothetical.
3. Employment Appeal Tribunal: Kerr J dismissed Asda’s appeal from the employment tribunal.
4. Employment Tribunal: Employment Judge Tom Ryan determined the preliminary issue for the claimants, holding that the common terms requirement was satisfied.