Asda’s equal pay row risks opening the aisles to more claims – Telegraph.co.uk

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Wendy Arundale worked for Asda for 32 years, two weeks and one day.

The 63-year-old, now retired, is one of 44,000 former and current employees, who have taken the supermarket to court over equal pay.

The legal battle, a landmark case without precedent in the private sector, goes back 13 years.

“It’s been going on, and on, and on,” says the grandmother of nine from Middlesbrough.

“I loved working there, but why should male colleagues at the distribution centres get paid more? It left quite a bitter taste in the mouth.”

Arundale had hoped that after the victory last Friday, the claim would be put to bed and thousands of her colleagues would get compensation.




Former Asda events coordinator Wendy Arundale is one 44,000 staff involved in the pay dispute that could land the supermarket with a bill for hundreds of millions of pounds 


Credit: Asadour Guzelian /Guzelian Ltd 

The Supreme Court verdict, upholding previous rulings, was in their favour after all. It effectively agreed that the roles of shop floor workers, mostly women, can be compared to those of depot workers, mostly men.

But this is only the beginning of an intricate battle.

The store workers, represented by Leigh Day, will need to argue that their jobs are of equal value to those in the distribution depots before they get any money.

“One of the reasons Asda has probably been fighting all the way to the Supreme Court is because these kinds of cases are notoriously drawn out,” says Stefan Martin, a partner at law firm Hogan Lovells.

“Amazingly, this is only a preliminary issue. This is not going to be decided for another number of years.”

Other firms will be watching future developments closely. The ruling has the potential to open the floodgates to further claims.

£8bn court battle

The private sector initially appeared to have dodged the equal pay claims bullet that cost councils, most notably Birmingham and Glasgow, billions of pounds.

They agreed settlements with female staff including care workers and school cooks who were paid less than men for work of equal value in recent years.

Leigh Day is already representing workers against Co-op, Tesco, Sainsbury’s and Morrisons as well as fashion firm Next, although their cases are at a much earlier stage. If the grocers lose, the compensation could leave an estimated £8bn hole in their finances.

Martin says: “To make it worthwhile for lawyers you need to find places in sectors where there are large numbers of people, and supermarkets were an obvious place because of the way they are set up with large numbers of shops and distribution centres.”

He believes it could spread to retail more broadly, especially as firms move towards internet orders and open more warehouses.

Claims could also arise from financial services or retail banking with staff in high street branches comparing themselves to people in call centres or vice-versa.

In the Asda case, the tribunal was shown one internal document that referred to store workers as being “made up of predominantly part-time females who are working at Asda for a secondary income to support the main household breadwinner”. It described distribution workers as being “predominantly male, full-time and primary income earners”.

Asda has defended its position, saying that the roles are fundamentally different and that its hourly rates were the same for female and male workers.

Michael Newman, a partner at Leigh Day, says that although he works for a company that will profit from the legal battle “in some way”, the focus should be on access to justice.

“These are people who would not be able to bring a claim on their own. They are only able to do it because a law firm will take the risk of that cost for such a long period of time.”

Previous hearings and rulings have also emboldened current employees from other supermarkets to join the claims in greater numbers, normalising the process, he says. They no longer fear they could lose their job or have their hours cut if they do.

Case by case

Industry observers also point out that the UK does not have the US class action system, which does not enable lawyers to benefit as much. Across the pond, if one person wins, everybody else wins, while at home every single individual has to file a claim if they want to benefit from it.

Martin at Hogan Lovells says: “I don’t think it’s over yet and there are firms that are going to use marketing quite aggressively to get people to sign up. There might not be an immediate payout, but it won’t necessarily deter that from happening.

“The other thing that is happening is the wider availability of litigation funding. There are lots of outfits there who will say, ‘we’ll fund your claims if there is a strong basis for it to be made’. There will be other employers or businesses pulled into this.”




Asda workers have been among those on the frontline during coronavirus


Credit: TOLGA AKMEN /AFP

Shirley Hall, a partner at Eversheds Sutherland, is less convinced. She says that while Asda is an interesting precedent, and an important one because the law hasn’t been particularly clear on role comparability, it isn’t a ‘one size fits all’ situation.

“Each of these cases will be fact sensitive to the particular employer because it will depend how they are set up as an organisation, how they get paid and when,” she says.

“It’s less likely to have more general impact in the private sector than in the wider retail sector.”

Even if firms get hit with a legal claim, there won’t be an immediate impact on the bottom line apart from the day-to-day administrative costs and legal fees.

No quick payday

Asda is on the hook for hundreds of millions of pounds, but even if the other linked trials don’t go its way, it will be a while before it coughs up any cash.

One industry executive says that it is unlikely it will want to settle as it could ultimately defeat the claimants.

The supermarket chain’s previous owner Walmart is expected to pick up the bill despite being snapped up last October by the billionaire Issa brothers and private equity firm TDR for £6.8bn.

The new owners fended off competition from Apollo and Lone Star, two other private equity bidders, which were said to have dropped out of the race after failing to agree on the potential cost of the equal pay dispute.

Sources close to the transaction said there is an arrangement in place with Walmart for a level of indemnity that is “sufficiently large” to cover any back payments.

When the Issas raised £3.5bn in debt to pay for Asda, loan and bond investors were told that the knock-on effect on the new owners would be minimal and it would be dragged out for so long it would not affect its credit rating.

But while law firms and big businesses plan their next moves, workers such as Arundale will be anxiously awaiting for the upcoming verdict.

“After so long I just hope that the decisions will go in our favour,” she says. “We’re not back in the 19th century.”

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