Equal pay claims against major employers such as Next, Sainsbury’s and Asda continue to make headlines, despite employers’ public proclamations about equality and inclusion. What impact have major group claims had on the gender pay equality cause? Jo Faragher investigates.

One of the biggest stories last year was the inquiry into the Post Office scandal, which highlighted the plight of a group of Post Office subpostmasters seeking justice after being wrongly accused of fraud – it even became an ITV streaming hit.

To date, this has been one of the most high-profile group litigations in the UK, and it demonstrates the importance of group actions in enabling people with limited resources to seek access to justice. But there are many more group actions going on that don’t become TV dramas, and a high proportion of them involve women.

Group litigation claims

Birmingham City Council to settle 6,000 equal pay claims 

Asda workers advance to final stage in equal pay claim 

Morrisons workers move forward in equal pay claim 

One of the most impactful (and long-running) has been against Birmingham City Council. Since a landmark equal pay claim was brought against it in 2012, the authority has paid out more than £1 billion in compensation.

In December, it reached a settlement with unions that will see thousands of women receive payouts this year, but the impact on the council has been severe. It issued a Section 114 notice of effective bankruptcy in 2023, largely due to liabilities from historical equal pay claims of up to £760 million.

We’ve also seen a growing number of claims against retailers including Asda, Morrisons, Sainsbury’s and Next. These mostly focus on differentials in pay between female workers on tills and the shopfloor versus male operatives in warehouses and distribution.

The mechanics of each group of claims are different, but they have one commonality – hundreds of women coming together under shared legal representation to seek financial redress.

Righting wrongs

But what has been the wider impact of these long, drawn-out, large-scale claims for gender pay equality?

“In some ways, group equal pay claims are about righting the wrongs of the past – pay disparities that often have their origins decades before – rather than tackling gender equality in the present,” explains Stephen Simpson, principal editor at Brightmine, the HR guidance service. “However, the ears of HR professionals, DEI practitioners and pay specialists will always prick up when a high-profile group equal pay claim is launched; reaches a milestone; or is finally won.”

This was reflected by an uptick in queries to Brightmine about equal pay from employers in Autumn 2024 after the employment tribunal upheld claims against Next, whose female retail consultants were considered to have undertaken work of equal value to its warehouse operatives.

Simpson adds: “Large employers certainly take note of these headline cases – and the big amounts being cited (it was estimated at the time that the case could cost Next up to £30m).

“This may lead them to take action that they may not have otherwise considered – in particular, we were asked about approaches to salary benchmarking and how to conduct an equal pay audit.”

Brightmine has also been asked about job evaluation schemes, which assess the content of jobs across the workforce by reference to their core components. This allows employers to identify roles of equal value so they can ensure staff are paid equally.

“Of course, an employer’s primary concern will be mitigating the risk of costly litigation,” he explains. “However, a by-product is that equal pay audits and job evaluation schemes can be an important step towards employers improving their gender equality in the long run.”

Strength in numbers

Emma Birch, partner at KP Law, which has represented women in group litigation claims against Tesco, Morrisons, Sainsbury’s and Asda, among others, argues that group claims provide access to justice for people who might not have otherwise pursued it.

The biggest thing organisations can do is look at whether their pay practices are justifiably fair” – Justine Woolf, Innecto

“There is little point in people having rights if they don’t have the power to assert them. The pay differentials can amount to life changing money for some people, or the difference between paying a major bill or having a holiday,” she says. “The legal process to conduct these claims is so involved, so complex, that it takes a huge amount of time. To ask an individual to do this against the likes of Tesco, how would they manage?”

A further consideration for claimants is that there is no cost recovery regime for employment tribunals as there is for cases in the High Court, where successful claimants are paid back their costs.

This applies a level of pressure to process claims expediently and discourages unworthy claimants, adds Birch: “The only means of reinforcing their rights is to ask someone else to pick up the tab and do the heavy lifting, for there to be strength in numbers.”

Nothing to lose

“The positive of collective action is that you’re giving people the confidence to group together who may not have financial resources or understanding of how the law works or what their rights are,” points out Justine Woolf, consultancy lead at reward experts Innecto.

“They get empathy and reassurance, and feel emboldened to take their case forward. But we can’t deny there is a commercial aspect for law firms, however, who make it easy for people to join the actions on a no-win, no-fee basis.”

Birch counters that “75% of something is better than 0% of nothing” when it comes to the commercial rewards for group litigation firms in building these cases, and that overall, they provide a force for good.

One of the lawyer’s roles in such cases is dealing with the “battle over minutiae” that is involved in establishing which roles can be considered of equal value for the purposes of the tribunal, something that would push most single claimants over the edge. “This could be something like how many times someone has to drop something in a bin, and how far away that is,” she explains.

Taking time

“While group claims improve access to justice, there are definite drawbacks, particularly the length of time that cases can take,” agrees Simpson from Brightmine.

“For example, some of the group claims against retailers in the UK are over a decade in now. This is particularly the case when the employer’s strategy is to bring forward technical challenges at every chance it can – that’s one of the reasons why the equal pay case against Asda has taken so long, for example.”

The settlement between unions and Birmingham City Council announced in December, he adds, is a rare example of a “quick” settlement that took just four years. Furthermore, equal pay claims in the retail sector are not likely to disappear any time soon, and could be joined by other sectors with historical inequalities between male and female roles.

While gender pay gaps measure the difference in average earnings between men and women, and equal pay is a legal requirement that men and women receive the same wage for “work of similar value”, addressing equal pay directly can tackle the root of the gender pay gap alongside other workplace equality measures.

“While retail is currently the key battleground, high-profile claims in that sector may encourage employees and their unions in other sectors to consider equal pay claims,” Simpson predicts. “Education, finance and insurance, and construction are among the sectors with the worst imbalances, according to gender pay gap reporting figures.”

Dr Giacomo Vagni, lecturer in the department of sociology at the University of Essex, believes that group litigation has been an important factor in raising awareness of pay inequalities.

“However, the most recent equal pay case in Birmingham is not the first the city council has faced, showing that litigation alone has limited impact. Other strategies, such as collective bargaining, pay transparency, and gap reporting, should be used alongside litigation,” he adds.

“A key challenge is that litigation has proven more successful in the public sector than in the private sector. Private companies often adjust job titles to obscure inequalities, making it harder to prove discrimination.”

Mitigating risk

From a practical perspective, the impact of group actions has been an increase in requests for pay audits, says Woolf, and employers are relying less on market data to set pay rates as the claims have shown these to be unreliable.

“There was an implied assumption before that if market data showed there to be a difference between men’s and women’s pay you could use that data as a defence, but this is no longer the case,” she explains. “Instead, organisations are thinking more broadly about whether they pay people fairly, and there’s a more general move to transparency, or putting levelling frameworks in place.”

Employers can act to mitigate their risk of an equal pay claim, however. Woolf advises: “The biggest thing organisations can do is look at whether their pay practices are justifiably fair. Just because there is a framework in place doesn’t mean this is the case.

“Look at how you make decisions, whether there is bias in recruitment and promotions, performance-related pay. What roles could be comparable and are you paying them differently? Why? Don’t assume your pay structures are fit for purpose because they’ve worked for years.”

Future pay equality

The forthcoming Employment Rights Bill includes provisions to enable the government to introduce legislation requiring larger employers to develop and publish an “equality action plan”, which would include details of how they are addressing gender pay differences, in addition to publishing their annual gender pay gap figures.

Simpson adds: “In theory, that’s great – but, as always with gender pay gap reporting, the problems will be enforcement and whether employers are implementing anything in practice that will improve gender pay disparities.

“Under the current wording of the Bill, the requirement is to ‘develop and publish’ an action plan – the legislation is not expected to require employers to implement action plans. In other words, the carrying out of the action plan will be left to the employer and implementation will not be enforced.”

If the legislative framework fails to influence employers to address pay inequalities in the workforce, then perhaps taking a more positive and proactive route will have more impact.

“Fundamentally, it’s not just about how you protect your reputation but also enhance it,” argues Woolf. “The likes of Aldi and Lidl have stepped up in the retail sector in terms of what they’re prepared to pay, and they’re pushing others to up their game, as well as growing their market share.”

Warning shot

Deeba Syed, head of policy, research and advocacy at the Fawcett Society, argues that big group claims should serve “as a warning shot” for all employers to tackle pay unfairness.

“It’s no surprise to have seen group equal pay claims in sectors like retail and the public sector, where women are over-represented – particularly in lower-paid roles,” she says. “The gender pay gap thrives for many reasons, including the fact women take on more unpaid caring responsibilities and men dominate in higher-paying roles.”

A Fawcett Society survey found that 60% of women either don’t know what their male colleagues earned or believed they were being paid less for the same work. A reluctance to discuss pay allows employers to get away with pay discrimination, Syed adds.

“We need to see all employers examining their pay structures, tackling their gender pay gaps, and not asking potential employees about their salary history. None of these things are expensive but they will help to stamp out unequal pay and close the UK’s gender pay gap, which continues to hit black and minoritised women hardest.”

Dr Vagni fears that progress will only happen through systemic change: “Women remain over-represented in precarious jobs, which are more vulnerable to casualisation and have historically been undervalued, leading to lower pay.

“Equal pay cases have helped expose the double standard of unequal compensation for comparable work, particularly in female-dominated fields like care and domestic work, compared to male-dominated sectors such as industrial work and construction. Winning these cases represents important social recognition of the undervalued nature of women’s work and hopefully may gradually help shift societal norms and attitudes over time,” he says.

With the issues running so deep, we’re not likely to see the back of group pay claims any time soon. But with group voices making noise about inequality, nor can employers continue to ignore their responsibilities.

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