The decision came, as awkward news tends to, late on a Friday. The employment court had been asked to rule not so much on matters of law as on matters of the market: what is value, and who works equal amounts of it? Tens of thousands of workers (most of them female) in stores were suing Asda, a supermarket, for being paid less than their colleagues (most of them male) in warehouses, on the basis that their work was of “equal value”.
After a decade of legal wrangling, on January 31st the judges sided with the shop workers (with the exceptions of personal shoppers and edible-grocery staff). It is the largest private-sector suit of its kind so far, involving at least 60,000 staff. And it could become the costliest: if Asda fails to prove that it had good reason (a “material factor”) for the pay disparity, in a process that could take another two years, the final compensation to the plaintiffs could be worth £1.2bn ($1.5bn), and boost Asda’s wage costs by an annual £400m, or 15%.
The court left no aisle unscrutinised. Judges weighed up the relative pitfalls of dealing with muttering customers or impatient lorry drivers. Ms Ashton regularly mopped up spills. Mr Opelt had to learn how to operate a hand-held scanner. Both Ms Hutcheson and Mr Ballard used a forklift for some of their work. Rival experts were hired. Precise timings were calculated (Mr Devenney spent 3% of his time tidying). Points for knowledge, communication and “emotional demands” were awarded. Detailed job descriptions submitted for the judges’ consideration spanned over three times the length of the complete works of Shakespeare.
The aim of all this is equality. Advocates of “equal value” suits argue that predominantly female jobs are systematically paid less than similarly useful “male” ones, and that needs rectifying. This was not originally a British notion of equality. Barbara Castle, a Labour minister who brought about the Equal Pay Act in Britain in 1970, had thought “equal value” too abstract a concept to be included in her law. But the European Union insisted, and an amendment came in 1983: British workers were then entitled to claim equal pay if they could prove they performed work of equal value to their opposite-sex colleagues. Few tried to do so. Such cases were time-consuming and therefore costly.
Then came a change in the economics, says Stefan Cross, a leading equal-pay lawyer. The European Court of Justice ruled in 1999 that winning litigants could claim back pay for six years instead of two. In Britain regulations for “no win no fee” lawyers had been relaxed. The combination made group “equal value” suits financially viable, even lucrative, for firms. And so their numbers soared. Reports by the Advisory, Conciliation and Arbitration Service, a public-arbitration body, counted over 50,000 new equal-pay cases in 2007-08, compared with just 3,000 in 2003-04.
The new wave hit councils and the health service first. A suit comparing cleaners with binmen in effect bankrupted Birmingham City Council. Supermarkets came next. Leigh Day, the law firm representing Asda’s staff, is also representing shop workers bringing claims against Tesco, the Co-op, Morrisons and Sainsbury’s. A clothes chain, Next, is already on the hook to pay compensation, possibly more than £30m. The cases are costly even for those not directly involved in them. Organisations pay millions to consultants to draw up “job evaluation schemes” in an effort to protect themselves from litigation.
The cases do not hinge on proving any actual sexism. The ruling against Next noted that “there was no conscious or subconscious gender influence in the way Next set pay rates”. Nor are women precluded from working in warehouses (Next’s was 47% female). The court will not even consider whether Asda had a good reason for the pay disparity until the coming stage of the case.
What started on the continent is likely to return there. The EU’s Pay Transparency Directive seeks to make the cases easier to bring in Europe too, says Jennifer Granado, a Brussels-based lawyer. The gavel-wielding hand is on the move, at the (considerable) expense of the invisible hand. ■
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