Supermarkets may need to pay £8 billion as Asda loses significant case

A long-fought round of legal battles between Asda and its workers regarding equal pay has drawn to a close with the workers coming out on top – a loss which could cost supermarkets around £8 billion.

As it stands, the predominantly male warehouse workforce is earning more than the predominantly female shop floor workforce. The Court of Appeal decided – in a ruling that has been described as “a major step forward in the fair pay battle on behalf of tens of thousands of store workers” – that the wage of these two roles should be comparable.

Lord Justice Underhill announced the decision, stating that Asda had “applied common terms and conditions wherever they worked” to warehouse and shop floor workers. This supports the workers’ belief that both groups should be paid the same as their work is of equal value – a belief that will now need to be proven in order to start making real change.

Similar cases have been raised for all of the so-called big four supermarkets – Asda, Morrisons, Sainsbury’s and Tesco – which could end up costing them a combined £8 billion if workers continue to win the legal bouts.

Legal experts involved in the case have expressed optimism in regards to the victory, suggesting that Asda should use the money they are spending on this legal case to pay all their workers a “fair” wage instead.

Asda has expressed disappointment but feels that it can still pull back and win the case as it continues in the Employment Tribunal – “At Asda, our hourly rates of pay in stores are the same for female and male colleagues and this is equally true in our depots. Pay rate in stores differ from pay rates in distribution centres because the demands of the jobs in store and the jobs in distribution centres are very different; they operate in different market sectors and we pay the market rates in those sectors regardless of gender.”

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Donna Martin

Donna Martin

Partner at Mackrell Turner Garrett
Donna Martin is a Partner in the Employment team at Mackrell Turner Garrett’s London office. She advises both employers and employees on a full range of contentious and non-contentious issues. As an employment law expert, Donna has significant experience in drafting employment contracts and handbooks, advising on grievance and disciplinary procedures and preparatory work prior to tribunals, including advising on the advantages and disadvantages of settling cases.