ASDA Stores Ltd v Brierley & Ors (Equal Pay Act), Court of Appeal - United Kingdom Employment Appeal Tribunal, August 31, 2017, [2017] UKEAT 0011_17_3108

Issuing Organization:United Kingdom Employment Appeal Tribunal
Actores:ASDA Stores Ltd v Brierley & Ors (Equal Pay Act)
Resolution Date:August 31, 2017

Copyright 2017

Appeal No. UKEAT/0011/17/DM



At the Tribunal

On 20 to 22 June 2017

Judgment handed down on 31 August 2017






Transcript of Proceedings






EQUAL PAY ACT - Article 141/European law

EQUAL PAY ACT - Equal value

EQUAL PAY ACT - Other establishments

  1. Although the point is not acte clair, the better view is that article 157 of the Treaty on the Functioning of the European Union is directly effective in a claim founded on equal pay for work of equal value. The Appeal Tribunal declines to make a reference to the Court of Justice of the European Union seeking a determination of this (or any) point.

  2. Where there is a ``single source'' of pay and conditions for both claimant and comparator, a comparison between them is permitted independently of whether unequal treatment arises from legislation or collective agreements and whether or not the employment is in the same establishment or service.

  3. Where no comparator works at the establishment where the claimant is employed, comparison is permitted applying the North hypothetical test. The better view is that the North hypothetical test remains good law and has survived the replacement of section 1(6) of the Equal Pay Act 1970 by section 79 of the Equality Act 2010.

  4. The Employment Judge did not err in law in deciding that the law is as stated above. He did not misapply the law. Nor were any of his findings of fact perverse. He reached conclusions that were open to him on the facts. There is no basis for interfering with his decision that the Claimants can compare themselves with their chosen comparators.




    Introduction: the appeal

  5. This appeal arises from about 7,000 equal pay claims brought by supermarket employees of the Appellant (Asda), nearly all women. The appeal is against a Reserved Decision of Employment Judge Tom Ryan sitting in Manchester, dated 13 October 2016. The claims are founded on equal value. The issue in the appeal is whether the Claimants can compare their work with that of distribution workers based at depots, who are nearly all men and are paid more. The Judge held that they can, a decision Asda says is wrong and should be reversed.

  6. Most of the claims were brought in 2014 and 2015 and relate back to a period before the Equality Act 2010 (``EqA'') came into force on 1 October 2010; in respect of which the old law in the Equal Pay Act 1970 (``EqPA'') applies. To decide whether comparability with the distribution workers is permissible, the Judge ruled in the Claimants' favour on issues formulated variously in the grounds of appeal. Very broadly, they require resolution of the following issues:

    (1) whether article 157 of the Treaty on the Functioning of the European Union (``TFEU'') is directly effective in equal value claims such as these;

    (2) whether the Judge correctly applied EU law on the existence of a ``single source'' of pay and conditions of employment for both claimants and comparators; and

    (3) whether the Judge properly applied domestic law (old and new) on comparison of terms between claimants and comparators, or the classes of employee to which they belong.

  7. The Judge heard evidence and submissions over six days in June 2016. He made detailed findings of fact about the history and practice of Asda in setting terms for, respectively, the Claimants (retail staff) and the comparators (distribution staff). He then set out the relevant law at length before considering the parties' submissions and ruling on them, in each case in the Claimants' favour, and giving his reasons for preferring the Claimants' arguments.

  8. In Asda's stores, the Judge found, the predominantly female retail workforce is not heavily unionised and terms are not set through collective bargaining, though there are differential rates based on cost of living differentials in three separate geographical areas. Pay and terms are imposed from the top down. In the separately located distribution depots, the predominantly male distribution workforce at each site now works on terms collectively bargained through the GMB, following national recognition agreements in 2012 and 2014.

  9. The appeal concerns the proper limits of comparison for the purposes of equal pay claims. In ascertaining where those limits lie, the parties placed emphasis on different EU law principles of general importance to their respective cases. Some of the issues raised could well be appropriately resolved by a reference to the Court of Justice of the European Union. In my judgment, at least one of the grounds of appeal raises an EU law issue that is not acte clair in favour of either party. Neither party strongly submitted that I should make such a reference; nor did either positively object to one.

  10. I have a power but not a duty to make a reference. After reflection, I have decided not to do so. To borrow from Stanley Burnton LJ (R (Risk Management Partners Ltd) v Brent LBC [2008] EWHC 692 (Admin), paragraph 47), my function is probably no more than juge rapporteur for the Court of Appeal. That court will be better placed to decide whether a reference is appropriate. The parties are prepared to tolerate the additional delay that will cause, and the uncertainty about the future jurisdiction of the Court of Justice.

  11. The debate before me was wide-ranging, sophisticated, subtle and presented with the utmost skill both orally and in writing. Credit and my gratitude are due to juniors and solicitors as well as the silks who presented the oral argument. To clarify the issues in my own mind, I have found it necessary to summarise the parties' submissions, sometimes in my own words. I have not attempted to cover all the nuances of every argument advanced. I hope I will do at least rough justice to the parties' arguments. There is a transcript of the oral hearing, and extensive written skeletons, should I fail to do so.

  12. For Asda, Mr Jeans QC emphasised the centrality of the individual employment relationship and, in particular, of the business unit to which the employee is assigned. Comparison is not of like with like, he said, where claimant and comparator work in different industries under different employment regimes. He described as ``a basic tenet of EU law'' the proposition that ``[a]n employment relationship is essentially characterised by the link existing between the employee and the part of the business to which he is assigned to carry out his duties'' (Rockfon A/S v Specialarbejderforbundet i Danmark C-449/93, [1996] IRLR 168, paragraph 31; USDAW v WW Realisation 1 Ltd Case C-80/14 (heard with other cases), [2015] IRLR 577, paragraph 44).

  13. For the Claimants, Mr Short QC emphasised the policy of EU law of eliminating sex discrimination in the workplace. Without the ability to compare groups of workers at different workplaces, the policy would be undermined by employers able to perpetuate ``occupational segregation'' and pay less for undervalued jobs predominantly done by women such as ``caring, cashiering, catering, cleaning and clerical'': see paragraph 15 in the February 2006 report of the Women & Work Commission chaired by Baroness Prosser and entitled Shaping a Fairer Future; and Cox J in Ministry of Defence v Armstrong [2004] IRLR 672 at paragraph 34:

    ``... pay discrimination is frequently systemic in character, arising as a result of gender job segregation or from discrimination in pay structures and grading systems, rather than from the terms of individuals' contracts of employment. ...''

    Is article 157 of the TFEU directly effective in an equal value claim?

  14. The first ground of appeal is that the Judge was wrong to hold that article 157 of the TFEU (formerly, article 141 of the Treaty Establishing the European Community (``TEC'') and, before that, article 119 of the Treaty of Rome which did not explicitly refer to equal value) is directly effective and may be relied upon directly by the Claimants in the present equal value claims. Asda contends, and contended below, that article 157 is not directly effective where a claim is founded on work of equal value rather than like work.

  15. Asda's unsuccessful argument below was that, to borrow the language of the Court of Justice (``ECJ'') in Defrenne v SABENA [1976] ICR 547, paragraph 21 and Worringham v Lloyds Bank Ltd [1981] ICR 558, paragraph 23, in an equal value claim the discrimination cannot be ``judicially identified'' on the basis of ``a purely legal analysis of the situation'' and ``solely with the aid of the criteria based on equal work and equal pay referred to by the article''. A complex evaluation of the jobs using ``expert methodology'' is required.

  16. The Judge heard submissions from the parties which, to Judge from his decision, were similar to those made to me. He preferred the argument of the Claimants that Worringham v Lloyds Bank had determined the issue in their favour. It did not establish only that article 119 (now 157) is directly effective in an equal value claim where equal value has already been established by internal job evaluation. Direct effect was not excluded by the need for expert evaluation in order to determine whether the jobs were of equal value, he decided.

  17. In challenging the proposition that article 157 is directly effective here, Mr Jeans relied on the following main points:

    (1) The ECJ in Defrenne v SABENA (paragraphs 18-22) had distinguished direct and overt discrimination (as in the facts in that case) from ``indirect and disguised'' discrimination only discernible ``by reference to more explicit implementing measures'', community or national.

    (2) The latter type of discrimination included equal value claims; while the former, identifiable ``solely by reference to the criteria laid down in article 119'', included those founded on legislation or collective...

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