ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL
Strand, London, WC2A 2LL
B e f o r e :
(Vice-President of the Court of Appeal (Civil Division))
LORD JUSTICE PETER JACKSON
| ASDA STORES LTD
|- and -
|BRIERLEY and others
Mr Andrew Short QC, Ms Naomi Cunningham and Ms Keira Gore (instructed by Leigh Day Solicitors) for the Respondents
Hearing date: 10-12 October 2018
Crown Copyright ©
Lord Justice Underhill:
THE FACTS IN OUTLINE
"ASDA's distribution and retail sectors are fundamentally different. They have evolved differently over time; operate in separate industries; have different objectives; are located in markedly different physical environments; demand different skill-sets; are subject to varied regulation and, most importantly, have distinctly different functions. Asda is essentially a retailer; its stores are its profit-making centres. The primary function of distribution is to act as an in-house provider of logistics services to ASDA's retail stores: it is predominantly a cost centre, rather than a profit-making operation, and is not consumer-facing."
None of the depots is located on the same site as any of the stores.
"The terms and conditions of the employees depend on the type of establishment at which they work. Retail employees are employed on Retail terms. Distribution employees are employed on Distribution terms. Those terms are set by reference to different processes."
THE BACKGROUND LAW
THE DOMESTIC LEGISLATION
"… [F]or purposes of this section … men shall be treated as in the same employment with a woman if they are men employed by her employer or any associated employer at the same establishment or at establishments in Great Britain which include that one and at which common terms and conditions of employment are observed either generally or for employees of the relevant classes."
"(2) If A is employed, B is a comparator if subsection (3) or (4) applies.
(3) This subsection applies if —
(a) B is employed by A's employer or by an associate of A's employer, and
(b) A and B work at the same establishment.
(4) This subsection applies if —
(a) B is employed by A's employer or an associate of A's employer,
(b) B works at an establishment other than the one at which A works, and
(c) common terms apply at the establishments (either generally or as between A and B)."
Section 80 (2) (a) provides (so far as material for our purposes) that "[t]he terms of a person's work are … the terms of the person's employment that are in the person's contract of employment". The equivalent to section 1 (3) of the 1970 Act, albeit differently worded, is at section 69.
THE EU LEGISLATION
"Each member state shall during the first stage ensure and subsequently maintain the application of the principle that men and women should receive equal pay for equal work."
There are two further short paragraphs by way of amplification but they are not material for our purposes.
"for the same work or for work to which equal value is attributed, the elimination of all discrimination on grounds of sex with regard to all aspects and conditions of remuneration".
Article 2 required member states to introduce domestic legislation whereby employees could enforce the principle of equal pay. In Worringham v Lloyds Bank Ltd (case 69/80)  ICR 558 the ECJ said, at para. 21 of its judgment (p. 589E):
"Although article 1 of the directive explains that the concept of 'same work' contained in the first paragraph of article 119 of the Treaty includes cases of 'work to which equal value is attributed', it in no way affects the concept of 'pay' contained in the second paragraph of article 119 but refers by implication to that concept."
The necessary implication of that is that the phrase "equal pay for equal work" in article 119 covers "work to which equal value is attributed".
"18. For the purposes of the implementation of these provisions a distinction must be drawn within the whole area of application of article 119 between, first, direct and overt discrimination which may be identified solely with the aid of the criteria based on equal work and equal pay referred to by the article in question and, secondly, indirect and disguised discrimination which can only be identified by reference to more explicit implementing provisions of a community or national character.
19. It is impossible not to recognise that the complete implementation of the aim pursued by article 119, by means of the elimination of all discrimination, direct or indirect, between men and women workers, not only as regards individual undertakings but also entire branches of industry and even of the economic system as a whole, may in certain cases involve the elaboration of criteria whose implementation necessitates the taking of appropriate measures at community and national level.
20. This view is all the more essential in the light of the fact that the community measures on this question, to which references will be made in answer to the second question, implement article 119 from the point of view of extending the narrow criterion of 'equal work', in accordance in particular with the provisions of Convention No. 100 on equal pay concluded by the International Labour Organisation in 1951, article 2 of which establishes the principle of equal pay for work 'of equal value'.
21. Among the forms of direct discrimination which may be identified solely by reference to the criteria laid down by article 119 must be included in particular those which have their origin in legislative provisions or in collective labour agreements and which may be detected on the basis of a purely legal analysis of the situation.
22. This applies even more in cases where men and women receive unequal pay for equal work carried out in the same establishment or service, whether public or private.
23. As is shown by the very findings of the judgment making the reference, in such a situation the court is in a position to establish all the facts which enable it to decide whether a woman worker is receiving lower pay than a male worker performing the same tasks.
24. In such situation, at least, article 119 is directly applicable and may thus give rise to individual rights which the courts must protect."
"Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied."
The new drafting thus spells out what the Court had in Worringham held was implicit in the old.
A. DOMESTIC LAW
THE CASE-LAW ON THE SCOPE OF THE PERMITTED COMPARISON
" First, I respectfully cannot accept the industrial tribunal's construction of this phrase. There is in my opinion no warrant for construing 'common' as 'broadly common'. The only two legitimate constructions of the phrase are either that 'common' means 'the same', or alternatively that the terms and conditions of all the relevant employees belong equally to more than one, are generally known, or are in general use, to employ some of the definitions in the Shorter Oxford English Dictionary. It may well be, and is indeed the position in the present case, that they are contained in a book such as the 'Purple Book'. Further, as the words themselves contemplated, such general terms and conditions may be common to all the employees of the particular employer, or common to the relevant classes.
 I reject the first of the above meanings of the phrase for the reasons given by the industrial tribunal … . If it were the correct construction then the consequent required identity of the terms and conditions of employment of the applicant and comparators would defeat the whole purpose of the legislation.
 Thus I am driven to adopt the alternative construction of the phrase 'common terms and conditions' to which I have just referred. Though so driven, however, it seems to me that by this route one does arrive at the purposive destination to which the draftsman was directing one. In support of this construction it is to be observed that the phrase is just 'at which common terms and conditions … are observed', not 'terms and conditions common to the applicant and her comparators are observed', or anything similar. Thus one is led to a concept of terms and conditions in a general sense, applicable across the board, or across the particular boards of the relevant classes of employee.
 In other words, the object of section 1(2)(c) and 1(6) is to ensure that a woman doing work of the same value 'in the same employment' enjoys equal terms and conditions. If the woman and the man are employed by the same or an associated employer at the same establishment then they are, well understandably, to be treated as in the same employment under the first two lines of the last phrase of section 1(6). ...
 It may be, however, that the man to whose work the woman alleges her work for the same or any associated employer is of equal value may be employed at a different establishment of the employer or associated employer. Then she is to be treated as in the same employment as the man if her establishment and his establishment are in the same concern and if at those establishments (this follows from the use of the words 'at which' in the subsection) common terms and conditions are observed either generally or for employees of the relevant classes, that is to say, the class of employee of which the woman is a member and the class of which the man is a member. Before the woman can have an equality claim there must, either throughout the employer's business, or at least in relation to the classes of employee to which each belong, uniformity of employment. A woman working in an establishment A, ex hypothesi doing work of the same value as the man, cannot have an equality claim in respect of that man working in establishment B, cannot to that end claim to be in the same employment as the man, unless at least she and her fellow employees doing the same work in establishment A and the man and his fellow employees doing the same work in establishment B each are subject to common terms and conditions. Otherwise either the woman or the man or both might be a 'rogue' enjoying uncommon terms and conditions of employment, possibly because of the particular establishment in which they work."
"On the question whether the appellant was in the same employment as the comparators working at different establishments, the view which prevailed with the majority of the industrial tribunal, the Employment Appeal Tribunal, and the majority of the Court of Appeal was that the comparison called for by section 1(6) was between the terms and conditions of employment of the appellant on the one hand and of the comparators on the other and that it was only if this comparison showed their terms and conditions of employment to be 'broadly similar' that the test applied by the phrase 'common terms and conditions of employment' in section 1(6) was satisfied. The majority of the industrial tribunal, affirmed by the Employment Appeal Tribunal and the majority of the Court of Appeal, held that the difference in this case in working hours and holidays was a radical difference in the 'core terms' of the respective contracts of employment which prevented the comparison from satisfying the statutory test. The contrary view embraced by the dissenting member of the industrial tribunal and by May L.J. in the Court of Appeal was that the comparison called for was much broader, viz. a comparison between the terms and conditions of employment observed at two or more establishments, embracing both the establishment at which the woman is employed and the establishment at which the men are employed, and applicable either generally, i.e. to all the employees at the relevant establishments, or to a particular class or classes of employees to which both the woman and the men belong. Basing himself implicitly on this view, the dissenting member of the industrial tribunal expressed his conclusion in the matter tersely. Having referred to the Purple Book, he said:
'3. Within that agreement there are nine sections and numerous clauses. They do not apply, with few exceptions, to any particular grade. It is clearly a general agreement and not specific to any particular group or class of employee.
4. It is, in my opinion, beyond doubt that the applicant and the comparators are employed on common terms and conditions, i.e. the A.P.T. & C. agreement, and clearly it is within the provisions of section 1(6).'"
"It seems to me, first, that the language of the subsection is clear and unambiguous. It poses the question whether the terms and conditions of employment 'observed' at two or more establishments (at which the relevant woman and the relevant men are employed) are 'common', being terms and conditions of employment observed 'either generally or for employees of the relevant classes'. The concept of common terms and conditions of employment observed generally at different establishments necessarily contemplates terms and conditions applicable to a wide range of employees whose individual terms will vary greatly inter se. On the construction of the subsection adopted by the majority below the phrase 'observed either generally or for employees of the relevant classes' is given no content. Terms and conditions of employment governed by the same collective agreement seem to me to represent the paradigm, though not necessarily the only example, of the common terms and conditions of employment contemplated by the subsection."
Although Lord Bridge goes on to give further reasons in support of his conclusion, it is important to appreciate that that paragraph expresses his view of the "clear and unambiguous" meaning of the relevant words of section 1 (6) and would accordingly be sufficient if it stood alone.
"That purpose is to enable a woman to eliminate discriminatory differences between the terms of her contract and those of any male fellow employee doing like work, work rated as equivalent or work of equal value, whether he works in the same establishment as her or in another establishment where terms and conditions of employment common to both establishments are observed. With all respect to the majority view which prevailed below, it cannot, in my opinion, possibly have been the intention of Parliament to require a woman claiming equality with a man in another establishment to prove an undefined substratum of similarity between the particular terms of her contract and his as the basis of her entitlement to eliminate any discriminatory differences between those terms.
On the construction of section 1(6) which I would adopt there is a sensible and rational explanation for the limitation of equality claims as between men and women employed at different establishments to establishments at which common terms and conditions of employment are observed. There may be perfectly good geographical or historical reasons why a single employer should operate essentially different employment regimes at different establishments. In such cases the limitation imposed by section 1(6) will operate to defeat claims under section 1 as between men and women at the different establishments. I take two examples by way of illustration. A single employer has two establishments, one in London and one in Newcastle. The rates of pay earned by persons of both sexes for the same work are substantially higher in London than in Newcastle. Looking at either the London establishment or the Newcastle establishment in isolation there is no sex discrimination. If the women in Newcastle could invoke section 1 of the Act of 1970 to achieve equality with the men in London this would eliminate a differential in earnings which is due not to sex but to geography. Section 1(6) prevents them from doing so. An employer operates factory A where he has a long standing collective agreement with the ABC union. The same employer takes over a company operating factory X and becomes an 'associated employer' of the persons working there. The previous owner of factory X had a long standing collective agreement with the XYZ union which the new employer continues to operate. The two collective agreements have produced quite different structures governing pay and other terms and conditions of employment at the two factories. Here again section 1(6) will operate to prevent women in factory A claiming equality with men in factory X and vice versa. These examples are not, of course, intended to be exhaustive. So long as industrial tribunals direct themselves correctly in law to make the appropriate broad comparison, it will always be a question of fact for them, in any particular case, to decide whether, as between two different establishments, 'common terms and conditions of employment are observed either generally or for employees of the relevant classes'. Here the majority of the industrial tribunal misdirected themselves in law and their conclusion on this point cannot be supported."
"If there are no such men at the claimant's place of work then it has to be shown that like terms and conditions would apply if men were employed there in the particular jobs concerned."
That is of course the hypothesis to which I have already referred in the context of Leverton: see para. 36 above.
"Not surprisingly, Ms Rose … argues that the tribunal should not speculate about the adjustments to the comparators' present terms and conditions which might be made in the unlikely event that they were transferred to the comparators' workplace. The hypothesis is that the comparators are transferred to do their present jobs in a different location. The question is whether in that event, however unlikely, they would remain employed on the same or broadly similar terms and conditions to those applicable in their current place of work. As Lord Slynn had recognised in [Smith], the object of the legislation was to allow comparisons to be made between workers who did not and never would work in the same workplace. An example might be a manufacturing company, where the (female) clerical workers worked in an office block, whereas the (male) manufacturers worked in a factory."
Lady Hale also endorsed Ms Rose's submission, summarised at para. 31 (p. 1003 E-F), that it was "unnecessary and illegitimate" to hypothesise the existence of a completely new all-purpose handyman, who might be the kind of manual worker who could plausibly be employed at a school.
"First, the 'common terms and conditions' referred to in section 1(6) are not those of, on the one hand, the women applicants and, on the other hand, their claimed comparators. They are, on the one hand, the terms and conditions under which the male comparators are employed at different establishments from the women and, on the other hand, the terms and conditions under which those male comparators are or would be employed if they were employed at the same establishment as the women. Second, by 'common terms and conditions' the subsection is not looking for complete correspondence between what those terms are, or would be, in the woman's place of work. It is enough that they are, or would be, broadly similar."
The first of those points is the one which I have made at paras. 35 and 43 above, and the second (though slightly compressed) is the point which was the subject of the actual decision in Smith.
"It is also plain from the reasoning of both Lord Bridge in the Leverton case  ICR 33 and Lord Slynn in the British Coal Corpn case  ICR 515 that it is no answer to say that no such male comparators ever would be employed, on those or any other terms, at the same establishment as the women. Otherwise, it would be far too easy for an employer so to arrange things that only men worked in one place and only women in another. This point is of particular importance, now that women are entitled to claim equality with men who are doing completely different jobs, provided that the women are doing jobs of equal value. Those completely different jobs may well be done in completely different places from the jobs which the women are doing."
"In the third place, to adopt such a test would be to defeat the object of the exercise. This is not just a matter of preventing employers from so organising their workplaces that the women work in one place and the men in another. There may be perfectly good reasons for organising the work into different places. But the object of the legislation is to secure equality of treatment, not only for the same work, but also for work rated as equivalent or assessed by the experts to be of equal value. It stands to reason, therefore, that some very different jobs which are not or cannot be carried out in the same workplaces may nevertheless be rated as equivalent or assessed as having equal value. One example is the (female) office worker who needs office equipment in a clean environment and the (male) factory worker who needs machines which create dirt and dust. But another is the (female) factory worker who puts microscopic circuits on silicon chips in one factory and the (male) factory worker who assembles computer parts in another. The fact that of necessity their work has to be carried on in different places is no barrier to equalising the terms on which it is done. It is well known that those jobs which require physical strength have traditionally been better rewarded than those jobs which require dexterity. It is one of the objects of the equality legislation to iron out those traditional inequalities of reward where the work involved is of genuinely equal value."
"… [I]t is not the function of the same employment test to establish comparability between the jobs done. That comparability is established by the like work, work rated as equivalent and work of equal value tests."
She refers also to the possibility of explaining any differential by reference to section 1 (3) of the 1970 Act. She continues:
"The 'same employment' test should not be used as a proxy for those tests or as a way of avoiding the often difficult and complex issues which they raise (tempting though this may be for large employers faced with multiple claims such as these). Its function is to establish the terms and conditions with which the comparison is to be made. The object is simply to weed out those cases in which geography plays a significant part in determining what those terms and conditions are."
"17. There is, in this connection, nothing in the wording of article 141(1) EC to suggest that the applicability of that provision is limited to situations in which men and women work for the same employer. The court has held that the principle established by that article may be invoked before national courts in particular in cases of discrimination arising directly from legislative provisions or collective labour agreements, as well as in cases in which work is carried out in the same establishment or service, whether private or public: see, inter alia, Defrenne  ICR 547, 568, para 40; Macarthys Ltd v Smith (Case 129/79)  ICR 672, 690, para 10, and Jenkins v Kingsgate (Clothing Productions) Ltd (Case 96/80)  ICR 592, 613–614, para 17.
18. However, where, as in the main proceedings here, the differences identified in the pay conditions of workers performing equal work or work of equal value cannot be attributed to a single source, there is no body which is responsible for the inequality and which could restore equal treatment. Such a situation does not come within the scope of article 141(1) EC. The work and the pay of those workers cannot therefore be compared on the basis of that provision."
"The position is thus that, for the principle of equal pay to have direct effect, the difference in treatment must be attributable to a single source which is capable of putting it right."
She goes on to observe that there appears to be "no case in the Court of Justice in which the principle of equal pay has not been applied between men and women who work for the same employer". She reviews the decision of this Court in Robertson v Department for Environment, Food and Rural Affairs  EWCA Civ 138,  ICR 750, in which a comparison was not permitted between the terms of civil servants in different departments: although all civil servants are formally employed by the Crown, responsibility for setting terms and conditions had been delegated by legislation to the different Ministers.
"In this case it is quite clear that the difference in treatment between the claimants and their comparators is attributable to a single source, namely the local authority which employs them and which is in a position to put right the discrepancy if required to do so. If section 1(6) were to operate as a barrier to a comparison which was required by EU law in order to give effect to the fundamental principle of equal treatment, it would be our duty to disapply it. However, for the reasons given earlier, it sets a low threshold which does not operate as a barrier to the comparison proposed in this case."
(1) The fact that the claimants were employed by the same employer as their comparators meant, in that case, that their terms and conditions had a single source within the meaning of Lawrence: see para. 56 above. In my view it is clearly implicit in para. 40 of her judgment that in the ordinary case employment by the same employer will satisfy the requirement for a single source. By declining to reach a conclusion about Robertson Lady Hale left open the possibility that there might be cases where a person who was in law the employer might not be regarded as the "source" of their employees' terms of employment; but such cases would be untypical.
(2) It followed that as a matter of EU law the claimants were entitled to compare themselves with the comparators: that is necessarily implicit in the second and third sentences of para. 41. It is also necessarily implicit that Lady Hale saw nothing in the circumstances of North itself that might take it outside the general rule stated above.
(3) The "low threshold" for comparison which on her construction section 1 (6) in any event presented (the reference, I am sure, is to her fourth reason – para. 52 above) meant that domestic law allowed the cross-establishment comparison in the instant case (see the final sentence of para. 41), so that EU law need only be relied on as an additional reason supporting that construction (see para. 36). I do not understand Lady Hale to have been adopting a Marleasing approach, but it would not matter if she were.
(4) If, contrary to (3), section 1 (6) would prevent the comparison, it would have to be disapplied because the claimants' right to compare with their claimed comparators had direct effect under article 157 as applied by Defrenne: see the penultimate sentence of para. 41, read with the first sentence of para. 40.
Overview of the Relevant Law
(1) The authorities are all concerned with section 1 (6) of the 1970 Act and it will be easier if I take its language as a starting-point, save that I will refer to terms "applying", as in the 2010 Act, rather than "being observed", because it clearly means the same thing and is more convenient.
(2) I will use the formulation "for employees of the relevant classes" from the 1970 Act: I consider below whether the formulation "as between A and B" in the 2010 Act has a different effect.
(3) I will refer to A's establishment as X and B's as Y and will assume that A is a cleaner and B a manual worker.
HAS THE 2010 ACT CHANGED THE LAW ?
THE ISSUE WHICH THE ET HAD TO DETERMINE
(a) if (however unfeasibly) retail workers were employed, in retail jobs, in depots, would they be on the same terms as retail workers employed at stores ? and
(b) if (however unfeasibly) distribution workers were employed, in distribution jobs, in stores, would they be on the same terms as distribution workers employed at depots ?
Although formally both questions were in play, before us – and, I think, in the ET – the focus was on (b), that is on commonality of terms for distribution workers.
"It was not suggested that comparators who work in a particular distribution centre had variations between themselves, although the respondents' case is that terms for pay could vary from depot to depot."
That is not perhaps crystal clear, but Mr Short explained, without demur from Mr Jeans, that Lord Falconer had been expressly asked in the ET whether Asda was arguing that different regimes applied at different depots and had confirmed that it was not. The concession is not surprising, given that all that is required is "broad" commonality of terms and the existence of minor variations between establishments, as in Smith, is immaterial.
THE STRUCTURE OF THE EMPLOYMENT TRIBUNAL'S REASONING
"Common terms need to be considered in three ways: first, whether there are (and were) common terms generally as between claimants and comparators; secondly, whether there were common terms, in the alternative, 'for employees of the relevant classes' under s. 1 (6) EPA 1970; and, thirdly, whether there are common terms 'as between A and B' under s. 79 of the EA 2010 …".
He proceeded to consider those three questions in turn. We are not concerned with the third, because it is disposed of by my conclusion at paras. 74-80 above.
(1) COMPARING THE CLAIMANTS' AND COMPARATORS' TERMS
The ET's Reasons
"I find that there is no material difference between Retail and Distribution in the following matters: hourly pay, admission to the bonus scheme after 6 months service, eligibility to a discount card after 12 weeks in service, matched contributions of 2 or 3 percent to pension, death benefit scheme entitlement, admission to the share save plan, maternity pay, adoption pay, bereavement pay, jury service pay, mobility, dress requirement, deductions from pay by Asda and the right to search."
As regards differences, he identified at para. 100 a number of respects in which there were what he described as "less significant" differences between retail and distribution terms, and at paras. 102-110 a smaller number of "more substantial" differences: for example, retail employees are not entitled to overtime pay while distribution employees are.
"212. The analysis I have set out in the findings of fact show that there is a significant correlation or comparison in a broad way between the terms in Retail and Distribution. Although not determinative, the fact that these terms have all been set by staff within the same employer is reflected in the strong similarities in the Handbooks and is for that reason a material factor. The fact that there are similarities in the two classes both of which are hourly paid employees is also capable of supporting the comparison. … .
213. I reject the respondent's submission that because these terms were negotiated over periods of time in different ways for the different groups they cannot be common terms. …
214. I accept that there are some differences in terms but I do not consider that they are so extensive as to undermine the broad comparison which had to be made. …"
He concludes, at para. 217, that it follows from those findings that "common terms apply generally".
Discussion and Conclusion
"Nor is there any bar to comparing the content of the respective sets of terms. To decide whether terms are common or not, it is useful to know what the terms are. The Judge was right to ascertain them and the parties were right to put them in evidence before him."
That needs some unpacking. There will in fact be cases where it is possible to decide that terms are common between two establishments without knowing what they are. If there is a document headed "Terms and conditions applying to employees [or, to cleaners and manual workers] at X and Y [or, at all establishments]" that will prove commonality by itself, whatever their content (subject only to checking that, despite the title, the document does not provide for different terms at different establishments). In the absence of such a document it may indeed be necessary to go through the actual terms at each establishment for employees in the relevant classes to see if they differ between the establishments; but that does not require comparison between the terms of the claimant and comparator classes.
(2) THE NORTH HYPOTHETICAL
The ET's Reasons
"230. The claimants' submissions were to the effect that Mr Stansfield had accepted in evidence that terms and conditions would be maintained if there was a hypothetical depot at the store. It was accepted by both witnesses that the hourly rate would not change upon a hypothetical relocation since the employees would be paid the rate for the job.
231. The claimants submit that there is no reason to suspect that other matters of detail would change. This, it is said is not such a case such that all employees who work in Manchester are on one contract and all those who work in London are on another. Mr Short pointed out that Baroness Hale in North accepted a submission that the tribunal 'should not speculate about the adjustments to the comparators' present terms and conditions which might be made in the unlikely event that they were transferred to the claimants' workplace'.
232. It was submitted there was no factual basis for concluding that there would be significant changes in terms and conditions because there are no Retail workers anywhere employed other than on Retail terms such that for example none receive premiums for hours worked between 2 and 10 pm nor for overtime. Similarly, no Distribution workers are employed other than on Distribution terms. Whilst there are differences to the enhanced rate paid after 2 pm, all receive a premium after that time and all receive overtime.
233. Where there is great similarity in relation to the terms as between Retail and Distribution they would clearly not change. The claimants point to holiday entitlements after the third year of service and pension arrangements.
234. Again the claimants submit that the terms do not need to be identical in this hypothetical situation but only broadly similar.
235. Whilst the claimants accept that the treatment of depot staff temporarily deployed to stores is not directly comparable they suggest it gives a better indication than witnesses' speculation."
"Both Mr Stansfield and Mrs Tatum [Asda's 'Executive People Director'] were asked in evidence what would be the position in the event of Distribution employees, however unlikely that might be, performing Distribution work in stores. Both clearly answered that if the Distribution employees were carrying out Distribution work they would be paid the rate for the job they were actually doing. … Both witnesses also maintained their primary position that Retail terms would apply to Distribution employees deployed to work in stores and Distribution terms to Retail employees deployed to work in depots."
He submitted that the final sentence effectively removes any weight that might otherwise be placed on the second.
"238. I do not attach any weight to the suggestion that a worker moving between depot and depot takes the new depot terms as assisting in this analysis. If I am correct in excluding that then the fact that there are some depots on different terms to others is also not relevant.
239. Neither am I persuaded that the homogeneity argument is of great weight here. Recognising that this a hypothetical comparison it is a postulation that a depot worker is carrying out his depot work although located at a store. It does not seem to me that that necessarily means that it has to be postulated that he is carrying out that work in the customer facing part of the store. Indeed, recognising the factual hypothesis is inherently unrealistic, it seems to be much more likely that depot workers doing Distribution work would not be in physical proximity to Retail staff and customers. I therefore conclude that homogeneity is unlikely to be a safe basis for concluding that terms would change particularly in view of the evidence of Mrs Tatum and Mr Stansfield that Asda would pay the rate for the job that was being done.
240. I agree that the temporary redeployment of depot workers into stores, or hypothetically vice versa is not properly comparable. It provides some slight support for the claimants' case. I do not consider that Mr Short's attempt to construct a hypothetical depot in a Retail car park is fatal to the claimants' argument.
241. In my judgment greater support is derived from the fact that the respondent operates what appear to be more favourable terms for the depot workers and it is inherently unlikely that depot workers would be willing to see those extended to Retail employees if hypothetical relocation of Retail employees occurred in that direction and equally unlikely that depot workers would be willing to give up their terms if there were hypothetical relocation of them into stores.
242. Furthermore the claimants rightly, in judgment, submit that weight can be placed upon the fact that there is significant similarity of certain parts of the contractual provisions and that these would be maintained in the hypothetical situation even if they are not sufficiently similar to amount to common terms generally."
Some of the points made in those paragraphs require elucidation, but I will provide that so far as necessary when I consider Asda's criticisms.
Ground 8: "Misapplication of 'North hypothetical' test"
Ground 9: "Perverse conclusion that North hypothetical test passed"
"The Executive Board of Asda and the members or subcommittees of that Board had and exercised budgetary control and oversight over both distribution and retail at all material times. The Executive Board was responsible for the differences in pay and could, or could subject to the overarching control of Wal-Mart, have introduced equality."
He observed (at para. 184) that the devolution of responsibility in Robertson was wholly different from the delegation of responsibility within a company or corporate structure.
"56. For all the intensity of Asda's attack on the Judge's reasoning and conclusions, far from considering them perverse I find them unassailable. This was an ordinary case of a large organisation delegating the setting of pay to separate internal organs. The Judge avoided the mistake made by the Tribunal in the Glasgow City Council case (see, in particular, paragraph 69 in Lord Brodie's opinion) of treating [Robertson] as creating a category of dual source cases where power to set pay is delegated and then not interfered with on a regular basis.
57. In my judgment, [Robertson], if as I assume it is correctly decided, was wholly exceptional and turned on the unique position within the civil service, where the setting of pay and most other terms of civil servants on a departmental not national basis, was enshrined in statutory and other instruments that would have to be expressly revoked if the power was to be reclaimed by the Treasury and exercised centrally.
58. Here, by contrast, Asda or Wal-Mart could interfere at the stroke of a pen or, more likely, the click of a mouse. The Industrial Relations Board ("IRB") included senior employees including the Asda's CEO, with an interest in pay across both retail and distribution staff. Moreover, the IRB received regular updates on distribution staff pay negotiations, while retail pay was signed off by the executive board.
59. It would be unjust and little short of absurd if the presence of a single source turned on whether Asda's or Wal-Mart's board happened to have overruled Mr Stansfield, or the CEO or the board happened to have overruled Ms Tatum. It was quite enough to justify the Judge's conclusion that the evidence showed that they regularly scrutinised the work done to set pay in, respectively, retail and distribution, and could overrule their decisions at any time."
CONCLUSION ON DOMESTIC LAW
(B) DIRECT EFFECT
Lord Justice Peter Jackson:
Note 1 It is to be noted that, even if, contrary to what Lord Bridge says, comparison were permissible in the case of his particular examples, the employer might be able to rely on the different historical and geographical contexts in order to raise a “material factor” defence. The effect of excluding such cases in limine is that the tribunal does not have to embark on that exercise at all. Although there is no doubt that the effect of section 1 (6) – subject to the effect of EU law – is to provide for such a threshold (or filter), inNorth, which I consider below, Lady Hale was concerned to emphasise that the threshold should not be used as a proxy for the substantive issues and that it should accordingly be treated as a low one: see para. 52 below. [Back] Note 2 It will indeed typically be the case in a cross-establishment claim that there will be no employee in the comparator’s class employed at the claimant’s establishment, because if there were it would normally be sufficient, and more straightforward, for the claimant to compare herself with him and not look elsewhere. But that will not always be so. There can be cases where there is an employee in the comparator’s class at the claimant’s establishment but he does not enjoy the particular benefits which are the subject of the claim or is for some other reason inappropriate as a comparator. And in mass claims involving claimants at many different establishments it would be very inconvenient to have to pick a comparator at every establishment.
[Back] Note 3 Although this is not stated explicitly in the report in the House of Lords, it is in fact the case that not all the applicants worked at pits, where there would also be surface-mineworkers employed. Some were employed in British Coal offices elsewhere, where no mineworkers were employed. InNorth, to which I refer below, Lady Hale suggested that this was probably the case (see para. 33 of her judgment), but I think that it is confirmed by the judgment of Wood P in the EAT ( ICR 529, at p. 533A). [Back] Note 4 In fact the same must be the case as regards the claimant’s class; but in Smith the issue only arose as regards the comparator class because, as I have said, it was common ground that there were no local variations as regards the terms and conditions of canteen-workers or cleaners.
[Back] Note 5 I appreciate that May LJ says in Leverton that there is “no warrant for construing ‘common’ as ‘broadly common’” (para.  in the passage quoted); but he was there addressing a different error. [Back] Note 6 I should note for completeness that this passage is substantially repeated in the later decision of the CJEU in Allonby v Rossendale and Accrington College (C-256/01),  ICR 1328; but the point is not elaborated. [Back] Note 7 See, for example, Jessemey v Rowstock Ltd  EWCA Civ 185,  ICR 550; and Blackwood v Birmingham & Solihull Mental Health NHS Foundation Trust  EWCA Civ 607,  ICR 903. [Back] Note 8 The distinction is even less significant in the present case because the “classes” are so widely defined: as I understand it, ignoring management, pretty well everyone employed at a store would be a retail worker and pretty well everybody employed at a depot would be a distribution worker. [Back] Note 9 The reference is to the fact that pay is defined in hourly terms, not to the actual rates. Likewise the following items refer to the existence of the rights in question not the quantum of those which are pecuniary. [Back]
Note 1 It is to be noted that, even if, contrary to what Lord Bridge says, comparison were permissible in the case of his particular examples, the employer might be able to rely on the different historical and geographical contexts in order to raise a “material factor” defence. The effect of excluding such cases in limine is that the tribunal does not have to embark on that exercise at all. Although there is no doubt that the effect of section 1 (6) – subject to the effect of EU law – is to provide for such a threshold (or filter), inNorth, which I consider below, Lady Hale was concerned to emphasise that the threshold should not be used as a proxy for the substantive issues and that it should accordingly be treated as a low one: see para. 52 below. [Back]
Note 2 It will indeed typically be the case in a cross-establishment claim that there will be no employee in the comparator’s class employed at the claimant’s establishment, because if there were it would normally be sufficient, and more straightforward, for the claimant to compare herself with him and not look elsewhere. But that will not always be so. There can be cases where there is an employee in the comparator’s class at the claimant’s establishment but he does not enjoy the particular benefits which are the subject of the claim or is for some other reason inappropriate as a comparator. And in mass claims involving claimants at many different establishments it would be very inconvenient to have to pick a comparator at every establishment. [Back]
Note 3 Although this is not stated explicitly in the report in the House of Lords, it is in fact the case that not all the applicants worked at pits, where there would also be surface-mineworkers employed. Some were employed in British Coal offices elsewhere, where no mineworkers were employed. InNorth, to which I refer below, Lady Hale suggested that this was probably the case (see para. 33 of her judgment), but I think that it is confirmed by the judgment of Wood P in the EAT ( ICR 529, at p. 533A). [Back]
Note 4 In fact the same must be the case as regards the claimant’s class; but in Smith the issue only arose as regards the comparator class because, as I have said, it was common ground that there were no local variations as regards the terms and conditions of canteen-workers or cleaners. [Back]
Note 5 I appreciate that May LJ says in Leverton that there is “no warrant for construing ‘common’ as ‘broadly common’” (para.  in the passage quoted); but he was there addressing a different error. [Back]
Note 6 I should note for completeness that this passage is substantially repeated in the later decision of the CJEU in Allonby v Rossendale and Accrington College (C-256/01),  ICR 1328; but the point is not elaborated. [Back]
Note 7 See, for example, Jessemey v Rowstock Ltd  EWCA Civ 185,  ICR 550; and Blackwood v Birmingham & Solihull Mental Health NHS Foundation Trust  EWCA Civ 607,  ICR 903. [Back]
Note 8 The distinction is even less significant in the present case because the “classes” are so widely defined: as I understand it, ignoring management, pretty well everyone employed at a store would be a retail worker and pretty well everybody employed at a depot would be a distribution worker. [Back]
Note 9 The reference is to the fact that pay is defined in hourly terms, not to the actual rates. Likewise the following items refer to the existence of the rights in question not the quantum of those which are pecuniary. [Back]