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Considering questions of settlement- Asda Stores Ltd v Brierley & Ors

Meredith Hurst Friday, September 15, 2017

Just a couple of weeks ago, the EAT delivered its decision in one of the 'cases to watch' for 2017, Asda Stores Ltd v Brierley & Ors. The case is still at a preliminary stage. The EAT decision relates to whether the claimants, store workers, who are mostly female, can compare themselves to distribution depot workers - who are mostly male and who are paid more - for the purposes of their equal pay claim. While it's a victory for the claimants - establishing a comparator is often the hardest part of an equal pay claim - there is still a long way to go on the litigation road, and no guarantee that their equal pay claims will be successful in the end. Despite this, there have been calls for Asda to drop the legal action.

Reasons to continue the litigation

Asda has already cited a number of factors they rely on to account for the difference in pay between shop floor workers and distribution centre workers. Given the importance of the litigation, not just for Asda but for the supermarket and retail industry as a whole, they may wish to continue the litigation to defend the position they have taken. This could include an appeal to the Court of Appeal on the issue of comparators.

Even if Asda decides not to pursue the 'comparator' issue further, it can still defend the claim as a whole. While the costs of litigation will be significant, given the number of employees involved, the costs of backdating the pay of upwards of 10,000 employees for 6 years will also be impressive. Estimates run to the millions of pounds. Continuing the litigation allows Asda time to develop a contingency plan - and even to overhaul its pay structure, should it choose to do so, to limit its liability should the claims eventually succeed.

Reasons to step back from the litigation

Despite the press statements, it may be that internally, Asda are not as confident about their position as they would like us to think. Even if they do stand by their policy on pay, the possibility that a tribunal will not accept Asda's justification for the pay differential. The consequent compensation awards may make it preferable for Asda to seek a settlement of the litigation before any further tribunal hearing. They may prefer, as an organisation, to take steps to review their pay structure, remedy any discrepancies in a way that suits them, without the criticisms that might be levelled at them in a substantive tribunal decision.

Linked to this is the finality that a settlement will bring. At present, even if Asda don't appeal the EAT decision on comparators, it could be 18 months before there is a Tribunal decision - and then the possibility of an appeal by the unsuccessful party. It could be a few years before the matter is finally resolved should the Tribunal and appeals process run its full course.

The ball is usually in the employer's court 

At the time of writing, Asda has expressed its disappointment in the decision of the EAT and has suggested that it may appeal to the Court of Appeal (there is some suggestion that leave to appeal has already been granted). If it decides to accept the decision of the EAT, there is still the matter of the substantive claim: which will deal with whether there is a genuine reason for any differential in pay between the comparator groups, unrelated to gender.

A decision to settle a tribunal claim, whether an individual claim for unfair dismissal, or as in this case, a class action seeking equal pay, is ultimately one to take following a cost benefit analysis of continuing the litigation and the potential outcomes. In some cases, where the costs of defending a claim to trial will far outweigh any compensation award, there will be a strong argument to be made in favour of settling. The time of managers and other staff members in preparing for trial and attending the tribunal hearings is also a factor to take into account. However, an employer adopting (as some do) a blanket-strategy of settling low value claims may, over time, find itself facing a series of these claims, some of which may be wholly unmeritorious.

The emotional aspect of settling an employment claim is also an important factor to consider. In this case, where it's a pay policy that is being challenged, it may be less emotive, although Asda have stressed their commitment to being an equal opportunities employer on a number of occasions through the litigation to date. However, in a claim where accusations are made about the behaviour of individual managers - bullying, discrimination, harassment - an employer may feel an obligation to stand behind those employees and support them. Settling in those circumstances can be viewed as the employer tacitly accepting that the behaviour took place, and create further issues in the workplace.

And finally… 

It is worth pointing out that there is no guarantee that a settlement would be reached, whether through ACAS and the COT3 route or settlement agreement. Even if Asda do decide to seek settlement, with such a large number of claimants involved, some may be motivated by a desire to 'prove a point' against their employer. Settlement negotiations can be complex in any situation - Asda would undoubtedly wish to maintain their position that there is no gender related reason for the pay differential. This may simply be impossible to reach agreement on, given that feelings appear to be running high - so the litigation would continue in any event.

We'll be watching the outcomes of this litigation with interest - and if you have any questions regarding the settlement of an employment dispute, get in touch!

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