Supermarket pay - probably defendable, but morally right?

Equal pay for equal work
Supermarket pay - probably defendable, but morally right?

When we talk about equal pay in our RewardReady Workshops, supermarkets always crop up.  And there’s usually a lot of debate.

Asda is the latest to hit the news having lost at the Court of Appeal last week on the issue of whether shop floor workers can compare the value of their work with warehouse operatives.

There’s been so much in the press that you can be forgiven for getting a little confused as to what is going on.  So I’ve tried to simplify things in the following summary:

  1. According to the Equality Act 2010, an equal pay claim can be brought on one of three basis: like work, work rated as equivalent (e.g. through internal job evaluation), or work of equal value (e.g. through external job evaluation conducted by an Employment Tribunal).
  2. Any job evaluation system used needs to be analytical (i.e. it breaks roles down into component parts) and free from gender bias e.g. points-based job evaluation or factor-based job classification.
  3. The long-standing legal dispute relating to equal pay within the big four supermarkets (Asda, Sainsbury’s, Tesco and Morrisons) concerns shop floor workers and warehouse operatives.   
  4. The legal firm Leigh Day claim to be representing more than 30,000 shop floor workers.  If the supermarkets loose, the payouts can go back up to six years and could be more than £8bn in total.
  5. In 2016 an Employment Tribunal ruled that shop floor workers can compare their roles to warehouse workers within the same company in order to establish ‘work of equal value’.  Asda appealed this ruling at the Court of Appeal last week and lost their appeal.  They could now choose to appeal further to the Supreme Court.
  6. However, the ruling that the roles can be compared is the first step.  They then have to be compared by an Employment Tribunal.  This requires looking at the demands of each job and will take a few months.  
  7. If the roles are determined to be ‘work of equal value’, then any difference in pay will need to be due to a ‘material factor’ other than gender (e.g. qualifications, experience, geography and shift-working).

If I were a gambler, I’d say that the shop floor and warehouse jobs will probably eventually be established as ‘work of equal value’.  But, even so, it’s likely that big employers such as supermarkets have robust and defendable pay frameworks in place and can still justify the different rates of pay on a material basis.

So, if this all plays out as I think it will, does this mean the supermarkets are right?  Many many organisations use market rate as a material factor to justify internal differences in pay.  However, market data is simply a reflection of what is actually being paid in other organisations and will be affected by years of undervaluing and underpaying women in the workplace.

My view is that paying some roles more than others just because others in ‘the market’ do may well be commercially sensible, and stand up to legal challenge, but is it the best approach for the future? And is it the morally right thing to do?  Probably not.

As a footnote: we advise clients to treat market data with caution as a useful indication of what to pay but not the answer.  It is best balanced with other factors (e.g. job levels, performance or skills development) to create a a degree of internal consistency and a fairer pay system. 


Image courtesy of JD Hancock

At Verditer we make reward more effective.  Do get in touch if you’d like help to create your employee reward strategy, implement a pay and grading structure, or to audit equal pay.