Retail giant Asda is faced with a potential £100m bill in an equal pay dispute that sounds a warning to employers.

An Employment Tribunal has given thousands of women who work at the retailer’s stores the right to proceed with equal pay claims.

The stakes are high for the supermarket giant as it is believed that this is the UK’s biggest private sector equal pay case. If the women succeed, they could collectively receive payments backdated to 2002, which could amount to more than £100m.

What does the law say about equal pay?

The law says that men and women are entitled to be paid the same for the same work or work that is found to be of equal value.

What is this case all about?  

At Asda, workers at the checkouts or who stack shelves in stores tend to be women and those working at distribution centres tend to be men. The difference in pay between the two types of workers is between £1 and £3 an hour.

The shop floor workers believe that their work is perceived as “women’s work”. Despite doing work of equal value, they argue, they are being paid less than men working in the distribution centres.

However, Asda refutes these claims, arguing that the demands of the roles are different. They contend that “Pay rates in stores differ from pay rates in distribution centres for legitimate reasons, including the different market rates for different jobs in different sectors.” They argue that hourly paid colleagues doing the same job in the same location are paid the same; men and women doing the same job in stores are paid the same, and females and males fulfilling the same work duties in distribution centres are paid equally.

However, the Employment Tribunal found against Asda. It concluded that the women in the stores can compare themselves to men at distribution centres and allowed their equal pay claim to proceed.

What happens now?

This is just a preliminary hearing, ruling on whether jobs in a distribution centre are comparable to those in its stores. The next step is for another tribunal to determine whether the jobs are of equal value.

Retailers with distributions centres and stores should follow this case with avid interest to see how it unfolds. After all, Asda is not the only retailer to find themselves in this situation. Sainsbury’s is also disputing similar legal action brought by 400 of its workers.

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