Asda Stores Ltd v Brierley and Others

JurisdictionEngland & Wales
CourtSupreme Court
JudgeLady Arden,Lord Lloyd-Jones,Lord Reed,Lord Leggatt,Lord Hodge
Judgment Date26 Mar 2021
Neutral Citation[2021] UKSC 10

[2021] UKSC 10

Supreme Court

Hilary Term

On appeal from: [2019] EWCA Civ 44

before

Lord Reed, President

Lord Hodge, Deputy President

Lord Lloyd-Jones

Lady Arden

Lord Leggatt

Asda Stores Ltd
(Appellant)
and
Brierley and others
(Respondents)

Appellant

Lord Pannick QC

Ben Cooper QC

Hollie Higgins

(Instructed by Gibson Dunn & Crutcher LLP)

Respondents

Andrew Short QC

Naomi Cunningham

Paul Livingston

(Instructed by Leigh Day)

Heard on 13 and 14 July 2020

Lady Arden

( with whom Lord Reed, Lord Hodge, Lord Lloyd-Jones and Lord Leggatt agree)

Overview of this judgment
1

The appellant, Asda Stores Ltd (“Asda”), is a major supermarket retailer in this country. The respondents (“the claimants”) are employed in its retail business. They are predominantly women. The claimants bring equal pay claims in the proceedings in which this appeal is brought. They seek compensation on the basis that in the six years prior to their inception of proceedings, starting with the claim of Mr A Bush in 2014, they received less pay than a valid comparator for work of equal value to that done by the comparator.

2

Claimants who bring equal pay claims must overcome a number of hurdles. In particular, under the legislation governing equal pay (explained in more detail under Domestic legislative framework in paras 8 to 17 below), claimants have to choose a valid comparator who is a real (and not hypothetical) person employed by the same, or an associated, employer. Under the “same establishment” requirement, that comparator must be employed either at the same establishment as the claimants, or at another establishment. (We are not asked to consider whether the word “establishment” conveys anything more than a location at which employees work.) However, if the claimants choose a comparator employed at another establishment and seek thereby to make what is called a “cross-establishment comparison”, the comparator must be employed on “common terms” (not “same” terms). Parliament has not provided a definition of “common terms” and the courts have therefore had to find the meaning of this expression intended by Parliament: see Three leading cases elucidating the statutory requirement for “common terms” in different situations, paras 19 to 33.

3

The claimants rely on a cross-establishment comparison with employees employed at Asda's distribution depots (“the distribution employees”). These employees are predominantly men. Asda contends that they are not employed on “common terms” within the meaning of the legislation. The retail and distribution locations are separate from one another and the employees at the different types of location, retail and distribution employees respectively, have different terms and conditions of employment. For further details on Asda's structure, see The growth of Asda's business and the determination of the remuneration of retail and distribution employees, paras 34 to 36 below.

4

The question whether the retail employees could use the distribution employees as comparators was tried as a preliminary issue. Asda had applied for the dismissal of the claimants' claims on the basis that this issue should be determined against the claimants. The claimants succeeded on this issue before the employment tribunal (Employment Judge Tom Ryan). Asda unsuccessfully appealed first to the Employment Appeal Tribunal (Kerr J) (“the EAT”) and then to the Court of Appeal (Lord Sales JSC, Underhill VP and Peter Jackson LJ), and now appeals to this court.

5

The essential question on this appeal is therefore whether the common terms requirement for the purposes of equal pay legislation was satisfied. The passage below entitled Three leading cases elucidating the statutory requirement for “common terms”, to which I have already referred, will show that what is required is simply (1) that the terms and conditions of employment of the comparators must be broadly the same at their establishment and the claimants' establishment, and (2) that, if there are no employees of the comparator's group at the claimants' establishment and it is not clear on what terms they would have been employed there, the court or tribunal applies what is known as the North hypothetical and considers whether the comparator's group would have been employed on broadly similar terms to those which they have at their own establishment if employed on the same site as the claimants.

6

The North hypothetical provides the short and direct answer in this case. For the detailed reasons given in this judgment, I conclude that the claimants were entitled to succeed on the North hypothetical, and that accordingly this appeal should be dismissed. It is unnecessary to consider whether the claimants could succeed (as the employment tribunal held) on any other basis or on the basis of EU law, which imposes a test of “single source” where the common terms requirement is not met. For these reasons, as amplified below, I would dismiss this appeal. That said, there was a substantial amount of evidence led in the employment tribunal which was not required. The proceedings became markedly over-complicated. This judgment therefore provides guidance on future case management of issues raised by the common terms requirement involving a cross-establishment comparison: see Implications for future case management by employment tribunals, paras 68 to 71 below.

7

This is clearly a very substantial case for Asda. At the time of the hearing before the employment tribunal in June 2016, Asda had around 630 retail stores and employed approximately 133,000 hourly-paid retail employees. At the date of the agreed statement of facts and issues prepared for this appeal, there were some 35,000 claimants. However, my conclusion, agreed by the other Justices hearing this appeal, does not mean that the claimants' claims for equal pay succeed. At this stage all that has been determined is that they can use terms and conditions of employment enjoyed by the distribution employees as a valid comparison. The claimants must still show that they performed work of equal value. Asda will be able to rely on any defence open to it, including (if appropriate) the statutory defence that the difference in pay was due to a genuine material factor which was not itself discriminatory on the grounds of sex.

Domestic legislative framework
8

The current primary legislation is the Equality Act 2010 (“the EA 2010”). The claims in issue on this appeal were brought under this Act but had also to be brought under the earlier legislation, namely the Equal Pay Act 1970 (“the EPA 1970”), as they related to periods when that Act was in force.

9

The preamble to the EPA 1970 describes the Act as having a clear and single purpose: “to prevent discrimination, as regards terms and conditions of employment, between men and women.”

10

The long title to the EA 2010 covers equality law in many areas and reflects the development of equality law since 1970. The EA 2010 does not simply consolidate and modernise the earlier legislation on equal pay. It made some changes and introduced some new positive duties as well. The long title reads:

“An Act to make provision to require Ministers of the Crown and others when making strategic decisions about the exercise of their functions to have regard to the desirability of reducing socio-economic inequalities; to reform and harmonise equality law and restate the greater part of the enactments relating to discrimination …; to enable certain employers to be required to publish information about the differences in pay between male and female employees; … to increase equality of opportunity; … and for connected purposes.”

11

Thus, for example, in the context of equal pay there are now positive duties on government ministers and also on employers. There are steps that employers have to take to deter differences in pay on the grounds of sex discrimination. Employers who have lost equal pay claims must in certain circumstances carry out equal pay audits if ordered to do so by the employment tribunal ( section 139A of the EA 2010 as amended by the Enterprise and Regulatory Reform Act 2013). From 2017, organisations employing 250 or more employees have been required to publish and report specific figures about their gender pay gap (Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 made under sections 78 and 207 of the EA 2010). At a wider level, in the public sector there is also now the general public sector equality duty on ministers of the Crown, Scottish ministers and certain public authorities to have regard to the desirability of exercising their functions so as to reduce socio-economic disadvantage (see section 1 of the EA 2010). This case represents this Court's first opportunity to consider the equal pay legislation in the context of the EA 2010. The Court is entitled to take account of the imposition of the positive duties described in this paragraph as part of the wider context in which it must interpret and apply the equal pay legislation. They show the determination of the legislature to make equal pay legislation and litigation effective and that determination is an aid to the interpretation of the legislation. The EA 2010 is inconsistent with any notion that Parliament thought it was time to take its foot off the pedal. The EA 2010 was preceded by a very careful and thorough review of equality law and there was wide public consultation. In the circumstances, there is no longer any need (if there was) to explore the provisions cautiously as might be the case if the provisions were novel. It is time to apply the provisions with confidence and unswervingly according to their terms, with Parliament's purpose clearly in mind.

12

Section 1(1) of the EPA 1970 provides that a woman's contract of employment shall be deemed to include an equality clause. Subsection (2) sets out the effects of...

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