Addressing Gender Pay Disparities: Analyzing the ASDA Case and Advocating for Legislative Reforms

Introduction

The ASDA case has been filed by over 30,000 workers, including both current and former workers against ASDA, a supermarket retail store over the issue of gender pay gap. It has exposed the flaws in the existing legislation and therefore asks for reforms.

The gender pay disparities arise due to factors, such as company culture not inculcating pay equality or lack of political will to impose rules on organisations. This essay will discuss requirement of publishing pay information, discrimination based on sex and recommendations by the House of Commons Women and Equalities Committee or the Government Equalities Office. It will determine the effectiveness of the current recommendation or proposal or existing employment laws or rules, such the UK Equality Act 2010 and relevant regulations around the principle of equality and discrimination based on gender vis-a-vis gender pay disparities.

ASDA ligation tests the effectiveness of changes, existing and proposed, to tackle gender pay gaps

Basic equality entails humans are alike and the element of ethics determines whether a matter is right or wrong. The element of morality also allows assessment of merits of ethical attitudes. The UK Equality Act 2010 provides the purpose of the Act of reducing socio-economic inequalities; reforming and harmonising equality law; enactments of discrimination and harassment laws; eliminate discrimination; and increase equality of opportunity among other things. Considering the principle of "people who are alike be treated alike” and seeing equality from an anti-discrimination perspective, there is an actual legal concern when certain people are placed relatively at a disadvantageous position just because they belong to a group. Such legal concern is demonstrated in the ASDA litigation. The ASDA case has been filed by over 30,000 workers, including both current and former workers against ASDA, a supermarket retail store owned by Walmart. It is split into three trials, all of them linked. In one of the trial, the main contention is whether factors such as geography could be justified for pay differences. ASDA lost a Court of Appeal judgment over this contention. This essay will determine whether this Equality Act 2010 and other existing employment legislation are sufficient to tackle the legal concerns, or whether litigation such as the ASDA litigation highlights the need for changes or the extent of effectiveness of current reforms to eliminate the gender pay gap.

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1. Nicholas Smith, ‘Why Do We Speak Of Equality?’ (2005) 11 Otago L. Rev. 53.
2. Frank I. Michelman, ‘The Meanings of Legal Equality’ (1986) 24 Harv. Blackletter J.

Principle of equality is found in the Equality Act 2010 and also the Sex Discrimination Act 1975. Anti-discrimination principle is based on equality. It aims to eliminate sex discrimination and promote equal opportunity between men and women. There may be a historical interpretation of equality in jobs that has led to instances of unequal pay, whether justifiable or not. This observation could draw relevance from the British case where trade unions mass litigation strategies created an unequalled understanding around equal value and indirect discrimination and also created comprehensive methods of job evaluation. This litigious approach showed link between the system of collective bargaining and litigation process. It addresses implicit value representations of women’s work. Another practice that creates instances of unequal pay could be the deliberate conduct of employers to ban or discourage employees from discussing compensation. It is therefore a point of concern to determine whether the existing laws and reform proposals are enough to curb employers’ practices of creating or continuing with gender pay disparities. The ongoing massive claim against ASDA is handled by “no win no fee” lawyers on behalf of workers litigants, who are demanding same pay as their male colleagues working. New developments were expected out of this litigation that could largely impact the private sector. The Government Equalities Office places some recommendation: include multiple women for recruitment and promotions; skill-based recruitment assessment tasks; structured recruitment and promotion interviews; show salary range for salary negotiation; transparency to promotion; diversity practices; shared parental leave; clear employers’ equality goals; and many more. The House of Commons Women and Equalities Committee also provide similar recommendation: part-time pay penalty and flexible working; equal sharing of childcare; tackle low pay in highly feminised sectors; and similar other actions. The underlying message is to move discussion around gender pay gap to one of economic necessity and not equality. The answer to gender‐based wage disparities, thus, lie in filling the blind spot in human resource and diversity management research and practice regarding gender identity diversity. Adoption of diversity goals can create a female premium for certain women. This involves intertwining supply and demand principle with human resource management. High-potential women with abilities to reach the upper echelons of companies, where women are underrepresented, may prove more valuable than high-potential men for achieving diversity goals of companies. Despite the existence of relevant laws and mandates, gender pay disparities are still in existence. A 2019 statistics released by the Office for National Statistics shows the gender pay gap “among full-time employees stands at 8.9%” and among all employees at 17.3%. The gender pay gap for all employees is higher than for full-time employees and part-time employees. The reason given is that women fill more part-time jobs that have lower hourly median pay than those of full-time jobs. Such jobs are more likely to be lower-paid occupations. Given this statistics, could we say that there has been development when the 2019 Office of National Statistics report on gender pay gap shows that the gap percentage at public sector stands at 16.8%; private sector at 23.6 %, and non-profit body or mutual association at 21.9%? The answer is no.

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3. Cécile Guillaume, ‘Overcoming the Gender Pay Gap: Equal Pay Policies Implementation in France and the United Kingdom’ (2017) Gender and Family in European Economic Policy. Palgrave Macmillan, Cham 63-80.
4. Marianne DelPo Kulow, ‘Beyond the Paycheck Fairness Act: Mandatory wage disclosure laws-a necessary tool for closing the residual gender wage gap’ (2013) 50 Harvard Journal on Legislation 385.
5. Cécile Guillaume, ‘Overcoming the Gender Pay Gap: Equal Pay Policies Implementation in France and the United Kingdom’ (2017) Gender and Family in European Economic Policy. Palgrave Macmillan, Cham 63-80.

The existing gaps in the UK direct the question to determine whether disclosure of pay gaps by entities or employers serves the purpose of reducing the pay gap. It also needs to be reviewed from the aspect of discrimination based on sex. Section 78(1) of the Equality Act 2010 empowers the state to make regulations that may requires employers to publish information about employees’ pay with the aim to see whether there is an existence of any pay differences between male and female employees. Mandatory disclosure would facilitate and improve enforcement of and compliance with employment regulations. It may also enable workers to come to informed labour market decisions, and may increase their preferences. The disclosure, as is stated in the Equality Act 2010, would also publicise discriminatory pay gaps, and may serve as a preventive measure. Though one could not say this has impacted ASDA, but evidently it has when the 2019 Gender Pay report on ASDA shows that its median hourly pay gap is 6.5% as compared to the UK’s 17.9% and mean hourly pay gap stands at 11.1% as compared to the UK’s 17.1%. However, the provision of Section 78(1) does not show commitment to make the disclosure enforcement. The use of the word “may” here indicates the disclosure is not mandatory. But, the flaw arising out of this non-mandatory nature of disclosure may be resolved by reviewing the gender disparity from an anti-discrimination aspect. But, how does the issue around the requirement of disclosure by Section 78(2) not applicable to organisation employing less than 250 employees. This exemption will ensure continued existence of pay disparity at smaller organisations.

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6. Mustafa Bilgehan Ozturk and Ahu Tatli, ‘Gender identity inclusion in the workplace: broadening diversity management research and practice through the case of transgender employees in the UK’ (2016) 27(8) The International Journal of Human Resource Management 781-802.
7. Lisa M. Leslie, Colleen Flaherty Manchester and Patricia C. Dahm, ‘Why and when does the gender gap reverse? Diversity goals and the pay premium for high potential women’ (2017) 60(2) Academy of Management Journal 402-432.
8. Ibid

Gender pay gap is one form of discrimination and such discrimination is based on sex. This is prohibited under the Equality Act 2010. Its Section 13(1) recognises direct discrimination that occurs when a person, with protected characteristics, is treated less favourably than others. Its Section 4 provides for ‘Other Protected Characteristics’ that protects discrimination based on age; gender reassignment; disability; marriage and civil partnership; race; pregnancy and maternity; religion or belief; sexual orientation; and sex. Given this situation, it is to be seen whether issues related to pay gaps is or must be brought within the ambit of Other Protected Characteristics, creating a mandatory legal and compliance obligation on employers to not discriminate between genders. There are cases that answer in affirmative. Take for example that of the case involving TV presenter Samira Ahmed and BBC. She won her gender discrimination case, which is a landmark ruling for equal pay campaigners. In the case of Haq & Ors v The Audit Commission the Court of Appeal held that the restructuring exercise that involved a department merger where pay protection was provided to senior grade, mostly male officers resulted in indirect sex discrimination and not objectively justifiable against the nine female Inspection and Information Officers claimants working with the Commission's Housing Inspectorate. Another case is that of Gibson & Ors v Sheffield City Council, where the Court of Appeal rejected the EAT ruling that difference in pay, where productivity bonuses were part of wages only paid to predominantly male street cleaners and gardener and not of female cleaners, was not "tainted by sex", and that the difference arose from necessary productivity payments not implementable for the carers, including women cleaners. These case principles either call for disclosure of payment information or could make disclosure of information on pay gaps irrelevant. The 2017 guidance on gender pay by the Advisory, Conciliation and Arbitration Service and Government Equalities Office requires that organisations publish gender pay gap. The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 also mandatorily requires publishing annual information relating to pay. How far is this complied with when employers seek trade secret protection of pay information as commercially valuable proprietary information? Also, the definition of ‘employment’ under Section 83 is restrictive as it takes into consideration only individuals engaged on a contractual employment. How will disclosure help if information about the terms and conditions of employment is not available? Also, how will disclosure occur if there is no way the total remuneration package is considered? The problem may also still exist when there are practices like continued existence of strategic peer benchmarking despite the existence of enhanced disclosure. This practice of benchmarking is intensified at firms that has low institutional, director and CEO ownership, and also at firms with busy and large boards and where shareholders complain about compensation practices.

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9. Cynthia Estlund, ‘Just the Facts: The Case for Workplace Transparency’ (2012) 63 STAN. L. REV. 355
10. Gowri Ramachandran, Pay Transparency, 116 PENN ST. L. REV. 1043, 1047–48 (2012).
11. Cynthia Estlund, Just the Facts: The Case for Workplace Transparency, (2012) 63 STAN. L. REV. 351.
12. Haq & Ors v The Audit Commission [2012] EWCA Civ 1621.
13. Gibson & Ors v Sheffield City Council [2010] EWCA Civ 63
14. Cynthia Estlund, Just the Facts: The Case for Workplace Transparency, (2012) 63 STAN. L. REV. 351.
15. Ibid.
16. Michael Faulkender and Jun Yang, ‘Is Disclosure an Effective Cleansing Mechanism? The Dynamics of Compensation Peer Benchmarking’ (2013) 26(1) The Review of Financial Studies 806.

Pay setting methods definitely differ between sectors. Public sector is more structured and it shows higher wage transparency. The reason being pay rates in public sector are public information. Thus, job evaluations for the purpose of equal pay assessment tend to be more likely to occur in public sector than it would in the private sector. ASDA litigation is a major test example regarding the implementation of equal job evaluation. Section 139A(1) of the Equality Act 2010 provides for regulations that may require an employment tribunal to “order the respondent to carry out an equal pay audit in any case where the tribunal finds that there has been an equal pay breach.” Section 139A(2) provides that equal pay breach means “breach of an equality clause”, or “a contravention in relation to pay of section 39(2), 49(6) or 50(6), so far as relating to sex discrimination.” Thus, Section 139(A) brings together the principles of equality and sex discrimination in respect to gender pay issues. But, these provisions should be read along with the job evaluation scheme in the UK to determine its effectiveness in reducing gender pay gaps. The UK follows a formal job evaluation scheme, where market pricing is extensively practiced. The UK consigns point factor schemes into supporting role, and thus rely more on analytical matching. However, there is a reported concern to achieve internal equity and demonstrating equal pay. Inequality is intertwined with wage determination and the pay systems that provide gender‐neutral legitimacy mask this inequality. One must remember that job evaluation, along with performance‐related pay, was not originally designed for promoting equal pay. For instance, managerial tools for determining wage levels were not designed for promoting equal pay. But, the tools and evaluation are still seen as tools for assessing work value and thus, job evaluation occupies a central place in promoting equal pay. The issue is with the fact that wages as assessed by pay systems or tools only demonstrate gendered cultural valuations of jobs and as such it legitimise gender‐based wage disparities. The question here is whether such job evaluation and the pay systems and tools will be able or could be used to show performance‐related pay and gender pay equity.

The ground reality with regard to all the recommendations and existing employment mandates, spoken earlier, mostly left to organisations to implement them. There is no political will behind them. The Financial Times reported in April 2019 that the existing gender pay gap has barely improved despite the 2017 new disclosure rules. It is, therefore, much to do with a few core challenges. First, lack of corporate culture, such as promoting flexible working, and better hiring and promotions is a contributing factor. Second factor is the non-requirement of providing details about measures to tackle gender pay issue. Third factor is the lack of government will to impose relevant measures, which is evident when the government rejected calls from Business, Energy and Industrial Strategy committee of the parliament to impose gender pay reporting measures and leaving it to the employers to take up action plans. Fourth factor is lack of ability of the Equalities and Human Rights Commission to check accuracy of data reported besides enforcing gender pay reporting. On the sphere of requirement of disclosure, it is reported in 2019 that almost half of all major British companies failed to reduce their gender pay gap in 2018, despite the presence of increasing government pressure and public scrutiny. Considering all these facts that the government or the employers are not showing any will to take positive actions, it is left to the employees to exercise their rights under the relevant legislation. For instance, to implement the recommendation of flexible hours, employees can exercise rights under relevant provisions of Employment Rights Act 1996 that provides for family-friendly working arrangement to facilitate a work-life balance. The Act provides for family-friendly provisions, such as covering paternity and maternity rights, requiring time off for dependants, or requests for flexible working. The Equality Act 2010, Section 19 provides that discriminates happens if a person applies upon another person a practice that is discriminatory and places the other person in disadvantage, or if it is not shown as a proportionate means to create a legitimate result. Employees can show a casual link between such discriminatory practice and the disadvantage.

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17. Mark B. Stewart, ‘Why is the gender pay gap higher in the private sector?.’ (2014) University of Warwick.
18. Michael Armstrong and Duncan Brown, ‘Job Evaluation Versus Market Pricing: Competing or Combining Methods of Pay Determination?’ (2017) 49(3) Compensation & Benefits Review 153-160.
19. Paula Koskinen Sandberg, ‘Intertwining gender inequalities and gender‐neutral legitimacy in job evaluation and performance‐related pay’ (2017) 24(2) Gender, Work & Organization 156-170.
20. Shirley Dex and Colin Smith, The Nature and Pattern of Family-friendly Employment Policies in Britain (The Policy Press 2002).
21. Elizabeth Aylott, Employment Law (1st Edition, Kogan Page 2014) 96. See, Philip Millington, Employment Law 2015 (Oxford University Press 2015) 63.
22. The Equality Act 2010, Section 19(1).
23. Ibid, Section 19(2)(c).
24. The Equality Act 2010, Section 19(2)(b).
25. Marriott v Oxford Co-op Society (No2) [1970] 1 QB 186.

After years of implementation of equality and anti-discrimination legislations, the gender pay gap is still a burning issue. As seen earlier, gender pay gap is a form of sexual discrimination and also against social progress. The real issue is to find the real reason behind implementing the legislation when there is a lack of collective political will to enforce them. Neither the companies nor the government intend to enforce the existing laws. It is for the employees, particularly women employees, to adopt collective actions using all relevant legal provisions, such as those under the Equality Act 2010 discussed here, to enforce their rights.

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Legislation

The Equality Act 2010

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017

The Sex Discrimination Act 1975

Cases

Gibson & Ors v Sheffield City Council [2010] EWCA Civ 63

Haq & Ors v The Audit Commission [2012] EWCA Civ 1621.

Marriott v Oxford Co-op Society (No2) [1970] 1 QB 186.

Bibliography

Books

Aylott E, Employment Law (1st Edition, Kogan Page 2014) 96.

Dex S and Smith C, The Nature and Pattern of Family-friendly Employment Policies in Britain (The Policy Press 2002).

Millington P, Employment Law 2015 (Oxford University Press 2015).

Journals

Armstrong M and Brown D, ‘Job Evaluation Versus Market Pricing: Competing or Combining Methods of Pay Determination?’ (2017) 49(3) Compensation & Benefits Review 153-160.

Estlund C, ‘Just the Facts: The Case for Workplace Transparency’ (2012) 63 STAN. L. REV. 355

Faulkender M and Yang J, ‘Is Disclosure an Effective Cleansing Mechanism? The Dynamics of Compensation Peer Benchmarking’ (2013) 26(1) The Review of Financial Studies 806.

Guillaume C, ‘Overcoming the Gender Pay Gap: Equal Pay Policies Implementation in France and the United

Kingdom’ (2017) Gender and Family in European Economic Policy. Palgrave Macmillan, Cham 63-80.

Kulow MP, ‘Beyond the Paycheck Fairness Act: Mandatory wage disclosure laws-a necessary tool for closing the residual gender wage gap’ (2013) 50 Harvard Journal on Legislation 385.

Leslie LM, Manchester CH and Dahm PC, ‘Why and when does the gender gap reverse? Diversity goals and the pay premium for high potential women’ (2017) 60(2) Academy of Management Journal 402-432.

Michelman FI, ‘The Meanings of Legal Equality’ (1986) 24 Harv. Blackletter J.

Ozturk MB and Ahu Tatli, ‘Gender identity inclusion in the workplace: broadening diversity management research and practice through the case of transgender employees in the UK’ (2016) 27(8) The International Journal of Human Resource Management 781-802.

Ramachandran G, Pay Transparency, 116 PENN ST. L. REV. 1043, 1047–48 (2012).

Sandberg PK, ‘Intertwining gender inequalities and gender‐neutral legitimacy in job evaluation and performance‐related pay’ (2017) 24(2) Gender, Work & Organization 156-170.

Smith N, ‘Why Do We Speak Of Equality?’ (2005) 11 Otago L. Rev. 53.

Stewart MB, ‘Why is the gender pay gap higher in the private sector?.’ (2014) University of Warwick.