Morrisons pay case sparks chain reaction

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The recent announcement that proceedings have been initiated against Morrisons means equal pay claims are being brought against the UK's four largest supermarkets

Given the number of staff involved, the potential financial ramifications are very significant. If reports are to be believed the Morrisons claim alone could be worth £1 billion.

As with the cases involving Tesco, Sainsbury’s and Asda, female staff who work in Morrisons’ stores are seeking pay parity with the predominantly male distribution centre employees. Asda has sought to challenge the claims by arguing that equal pay law does not permit comparisons to be made between these two groups. It was unsuccessful at an employment tribunal and an employment appeal tribunal, but the claim has now progressed to the Court of Appeal.

Another key issue is likely to be whether the store-based jobs involve work that is of 'equal value' to that carried out by staff in the warehouses. Determining this question can be a lengthy process. Usually it will involve an independent expert being appointed to prepare a report. They will compare the demands made on the two sets of workers in areas such as effort, skill and decision-making. In some cases a party can be permitted to introduce evidence from their own expert to challenge the findings of the independent expert.

Even if it is found that the two groups are performing work of equal value, Morrisons will be able to defeat the claims if it can show that any difference in pay is attributable to a material factor not based on sex. This can also be a complex issue for the tribunal to grapple with.

Whether or not a particular factor is based on sex can be argued in a number of ways. In some cases a pay disparity can be attributed to market forces, with the employer asserting that it pays each set of workers the going rate for the job. However, if it can be shown that the market rate for the work undertaken by female staff has been affected by historical perceptions of the value of what is seen as 'women’s work', this factor could be regarded as tainted by sex.

If the Morrisons employees are successful they will be able to recover pay arrears going back up to six years. Some reports have suggested that the difference in pay between the two groups is around £2 an hour. This would equate to around £25,000 for a full-time employee over six years (more when interest is added). It is also worth noting that although equal pay claims are usually brought in employment tribunals, they can also be pursued in the courts where there is a much longer limitation period of six years. This means that staff who retired or left their jobs some time ago could also be entitled to compensation.

Given the high stakes, it seems likely that Morrisons will look to pursue all arguable lines of defence. As a result it may be some years before the claims against it and the other supermarkets are finally determined. In the meantime, what with the recent introduction of gender pay gap reporting obligations and the publicity created by the publication of pay data for high-profile figures at the BBC, it may be that we see many more claims both in the retail sector and beyond.

Alex Bearman is a partner at Russell-Cooke

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