"The ripple effects of the case will be huge, it is probably the case which will have the single largest effect on the economy of the UK in recent years". No, this is not a quote from the Leave or Remain campaigns, but a quote by Lord Falconer of Thoroton QC, acting on behalf of Asda, in its appeal against the decision of the Employment Appeal Tribunal (EAT) not to stay indefinitely the equal pay claims made by over 7,000 employees of Asda.
The Asda equal pay case is being hard fought and for good reason. Lord Falconer QC asserts that "if successful it will have an enormous effect not only on Asda and all its 150,000 employees, but also on the retail trade generally". Its implications could also be felt much wider afield, as it is the first large scale equal pay case being pursued in the private sector. Past cases have predominantly been in the public sector, against local authorities and the NHS in particular.
The purpose of Asda's original application to stay the case indefinitely was to compel the employees to bring their claims in the High Court. However, in its judgment handed down yesterday, the Court of Appeal rejected Asda's submission that the Employment Tribunal's power to stay proceedings indefinitely could be exercised for the purpose of relinquishing jurisdiction to the High Court – thus re-affirming the EAT's conclusion that an employee has a right to decide whether to have their equal pay claim heard in the Employment Tribunal or the High Court. This is relevant as, in many cases, an employee will prefer to bring their claim in the Employment Tribunal because of the costs rules in the High Court (although, in this case, Asda had given an undertaking that it would be willing to apply the same costs rules in the High Court as would apply in the Employment Tribunal if the employees commenced High Court proceedings).
The Court of Appeal also went on to reject the submission that the High Court was the appropriate forum to consider this case, given the complexities of the case and because it was a "pathfinder case which will set the template for future private sector equal pay litigation". The Court of Appeal was satisfied that the Employment Tribunal was the appropriate forum to hear this case, as there are a number of highly able judges in the Employment Tribunal who have the necessary experience and specialist knowledge to hear the claim. In its view the intricacy of some of the arguments which are likely to arise in this case are merely the "meat and drink of complex equal pay claims".
The Court of Appeal's decision in this case is hardly surprising. But it is a reminder of how hard fought and costly these cases can be. It is also a reminder that large scale equal pay claims are no longer the sole preserve of the public sector. Private sector employers are also vulnerable to claims and the risk of such claims is only likely to increase once the gender pay gap reporting obligations come into play. Gender pay gap statements may not need to be published until April 2018, but steps can and should be taken now if you have any concern that the information you will be required to publish in 2018 will show any gender pay disparity (historic or otherwise).
If you would like to discuss what steps you could be taking now to identify and manage your risk, please do contact any member of the team and we would be happy to help you, in addressing any immediate concerns and in ensuring you take the necessary steps to drive your business, and its pay strategy, forward.