Asda Loses Key UK Ruling in $1.5 Billion Equal Pay Contest

British supermarket chain Asda Group Ltd. lost a crucial ruling in its £1.2 billion ($1.5 billion) equal pay dispute as a U.K. court found a number of the jobs done by female employees were of equal value to their male colleagues.

Asda failed to block claims from 12 out of 14 women who are leading the case on behalf of tens of thousands of store workers. The ruling sets the stage for the final hearing where Asda must justify the pay difference to avoid the payout estimated at as much as £1.2 billion by the claimants. The employment tribunal dismissed the remaining two claimants in a ruling made public on Monday, which Asda said represented about 20% of the total claims.

“The decision means tens of thousands of Asda shop floor workers have now won two out of the three stages of their equal pay claim,” according to a statement by Leigh Day, a law firm representing about 60,000 Asda workers in the “largest ever private sector equal pay claim.”

The ruling is a key step in the long-running legal battle where Asda and its competitors are contesting equal pay claims estimated at over £8 billion in total. The case can set a precedent for similar claims faced by J Sainsbury Plc, Tesco Plc and WM Morrison Supermarkets Ltd. and Co-operative Group Ltd. — all embroiled in equal pay claims from tens of thousands of retail workers.

“We strongly reject any claim that Asda’s pay rates are discriminatory,” Asda said in an emailed statement. The company “will continue to defend these claims at the next stage of the litigation because retail and distribution are two different industry sectors that have their own market rates and distinct pay structures.”

The final amounts of any payout will be decided by the courts and both the retailer and workers can appeal the ruling in the higher court.

In some cases, the judges declared a “mixed picture” when they compared the store-based jobs with the warehouse roles, meaning that those roles could be compared to some jobs but not all of them.

Walmart Inc., which maintains a 10% stake in the supermarket, could have to share a part of the liability if Asda workers win the case. The U.S. retail giant indemnified buyers Zuber and Mohsin Issa and current majority shareholder TDR Capital for an undisclosed portion of any financial damages arising from the equal pay claims when it sold the business in 2020.

The case relates to a period between 2008 and 2014. Workers in Asda’s stores, who are mostly women, argue that they are entitled to be paid the same as workers in Asda’s depots, who are mostly men.

Under UK law, work of equal value must be paid equally unless an employer can show that the difference in pay is explained by a reason that is not sex discrimination.

“These women have been fighting for what they are owed for more than ten years and are close to ending the era of retailers systematically undervaluing women,” said Nadine Houghton, National Officer at GMB, a workers union that helped bring the claims.

Top photo: A shopper at an Asda store in London. Photographer: Hollie Adams/Bloomberg.