Asda’s equal pay case is shocking, but not rare

Supermarket giant Asda is facing a £1.2 billion equal pay claim. More than 60,000 of Asda’s mostly female shop workers allege they were paid less than male warehouse workers.

The Asda tribunal has caught public attention, but cases over unequal pay are not as rare as workers might think.

New analysis of Ministry of Justice data from money.co.uk reveals that there were more than 13,500 equal-pay-related claims filed in England and Wales within the last year.

Asda workers rally together for equal pay

A group of Asda workers held demonstrations outside the Trades Union Congress (TUC) offices in Brighton and Manchester earlier this week, where the hearing will take place. More female workers are also planning to rally outside its Perth superstore next week.

It is alleged that Asda’s retail workforce, which is mainly female, receives up to £3.74 less than its warehouse workers, who are predominantly male.

The tribunal is expected to last three months and could see underpaid roles be able to claim six years’ worth of pay as compensation, according to law firm Leigh Day. It comes after fashion retailer Next was made to pay £30 million after it was ruled that the company failed to show that its pay gap between male and female staff was not gender discrimination.

An Asda spokeswoman said that while the company respects current and former employees to bring this case, it strongly denied the claims that its pay rates are influenced by gender.

“There are numerous different jobs within retail and within warehouses,” she added. “We continue to defend these claims because retail and distribution are two different industry sectors that have their own distinct skill sets and pay structures.”

This isn’t the first time Asda disappointed workers on pay this year. The company previously faced an IT glitch in which thousands of workers received incorrect pay, including missing two weeks’ worth of wages.

Statistics reveal that equal pay cases aren’t rare

Gender pay gaps are a persistent issue in the UK, both in large and smaller businesses, as the money.co.uk analysis reveals; equal pay disputes led to 13,594 claims being made in workplaces in the last year.

The average award for sex discrimination cases was also reported to be at £37,607, including unequal pay cases, according to money.co.uk’s HR Red Flags report.

The gender pay gap in the UK currently stands at 9.1%, according to PwC Research. 

Big businesses, such as easyJet, British Airways and Co-op have been named and shamed for failing the gender pay gap, but even startups and younger businesses are implicated. The gap in UK tech startups  is at 30% – more than double the national average. 

As this sector tends to be male-dominated, this significant gap reflects the broader structural issues in the industry. Factors such as fewer female leaders, a lack of mentorship opportunities for women and the motherhood penalty contribute to the disparity.

What SMEs should know about equal pay

Understanding equal pay is important for small businesses and SMEs. Paying employees equally is a legal requirement, and failing to do so can result in tribunal hearings, expensive legal fees and a damaged reputation. Companies with 250 or more employees must also report their gender pay gap data on a specific day every year (known as a “snapshot date”).

Additionally, while organisational culture and work-life balance play an important role in employee engagement, a fair salary can also be a powerful motivator. 39.4% of employees also ranked fair pay as the main reason for staying with an organisation, according to research by Nectar.

While Asda is facing a highly publicised tribunal, this case is merely the tip of the iceberg when it comes to the UK’s gender pay gap problem. SMEs should take the increasing number of tribunal cases as a critical reminder to address pay equity in their organisations.