Supermarket staff could win millions in equal pay cases

Supermarkets may have to pay millions of pounds in higher wages and back pay to store staff, mainly women, if test cases for equal pay being brought by 400 workers are successful.

The claims, being brought against Asda, are a major test of equal job evaluation in the private sector. They are being pursued by the employment lawyers who two years ago won a landmark £1bn supreme court ruling for lower-paid women employed by Birmingham city council.

If pay discrepancies in equal value jobs can be proved, other supermarkets and retailers, such as Tesco, Sainsbury’s, Morrisons, Marks & Spencer and John Lewis, could face similar claims. The Asda cases will determine if the supermarket’s store staff jobs, which are mainly held by female workers, are of equal value to higher-paid jobs in the company’s male-dominated distribution centres. If they win, workers could be entitled to six years’ back pay for the difference in earnings.

“The implications for any supermarket are enormous,” said Michael Newman of Leigh Day, the legal firm representing the workers. The cases are possible because Asda, which employs 172,000 staff, owns and operates its own distribution warehouses.

If the legal action succeeds, other supermarkets who also own their distribution centres may face similar claims. Most retailers own some of their distribution centres and lease others and use a mix of directly employed and third-party staff.

Morrisons directly employs nearly three-quarters of staff in its distribution network. Tesco says it directly employs the majority of such staff even though it leases most of its distribution centres.

Sainsbury’s refused to comment on the employment status of its distribution staff but said it owned most of the facilities they work in. John Lewis directly employs 3,500 staff in its distribution network, the vast majority of such workers, while Marks & Spencer employs just a fifth of its staff directly.

While retailers would not comment on the pay and conditions of their staff, industry insiders said it was difficult to compare jobs in warehouses directly with those in stores. Those stacking goods in distribution centres tend to be paid more than shopfloor staff, but some retailers said this was justified by the uncomfortable conditions, additional skills and unsocial working hours involved.

Until now equal job evaluation has mainly affected local councils, where jobs are assessed and given pay grades. Birmingham alone has so far paid around half of its £1.1bn bill for the back pay settlements to the women – including cleaners, cooks, care workers and school lunch supervisors – who were denied bonuses and attendance allowances given to male road cleaners and refuse collectors.

The Asda parity issue is expected to be heard within the next two months at Manchester employment tribunal. Newman said Leigh Day was representing 414 store staff, most though not all women.

“In the supermarkets check-out staff and shelf-stackers are mostly women. The people in the warehouses are pretty much all men. And, who would be surprised, the group that is mostly men gets paid more,” he said. “We are very confident that the jobs are pretty much the same. In the warehouses they take stuff off the shelves, put it on a pallet and stick it on a lorry. In the supermarket, they do the reverse: take the pallets off the lorry, unstack them and put stuff on the shelves.”

Asda said in a statement: “We are aware of a small number of claims. We pay a fair market rate for the job people do regardless of gender and we don’t recognise discrimination in our business.”

Victory would mark a significant step in the battle for equal pay, said Newman. “There has been huge advancement in the public sector. But in the private sector it is still the 1970s. Job evaluations don’t happen. Cases aren’t brought. So you still get this very segregated workplace. Women are over here doing the women’s work and men are over there doing men’s work.”

The precedent for equal pay claims for comparable jobs was set in 1997 when 1,500 Cleveland dinner ladies won a £5m payout.

A national single status agreement was drawn up the same year giving local authorities 10 years to introduce fair and non-discriminatory grading structures. Tens of thousands of mainly female workers in such jobs, however, are still awaiting settlements for back pay. The general and public service unions GMB and Unison said they had 40,000 outstanding cases across the UK, including in Birmingham.

The latest figures from the Local Government Association show that in 2013, 57 councils still had to complete equal pay reviews, and 17 were experiencing problems that were delaying their work, including reaching agreements with unions on job evaluation and pay line modelling.

Birmingham, the largest local authority, recently put the National Exhibition Centre up for sale for a reported £300m. The council, which settled 11,000 cases in October, with thousands more continuing, insists the sale is not just to fund equal pay, but also other capital programme expenses and the NEC required major investment that it could not provide.

Brian Strutton, the GMB’s national secretary for public services, said he had no sympathy for the council, but enormous sympathy for the women forced to wait while the council “salami-sliced” and dragged out proceedings, with some claims taking 10 years.

“It must have cost tens of millions of pounds in legal expenses, and thousands of women who work for them and used to work for them have been waiting a long time for their settlements,” he said. “It is all money that is unequivocally owed to women who could have done with that money in their pay packets at the proper time.” He called on the government to “get a grip on the tribunal system”.

Ben Patrick, legal officer for Unison, said allowing single groups as one representative claim could speed up cases that routinely take up to 10 years.

Statistics show 37,400 equal pay cases were brought in 2009-10, 34,600 in 2010-11 and 28,800 in 2011-12.

The 2012 supreme court hearing in effect extended the time limit for equal pay claims to be brought from six months to six years after leaving employment. It was described by Leigh Day at the time as the biggest change to equal pay legislation since its introduction in 1970.

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