Following a long, drawn-out legal battle that began three years ago, thousands of current and former Tesco employees have won a big victory in their fight for equal pay.
In a landmark decision made by the European Court of Justice (CJEU) against the supermarket chain, billions may be owed in back pay claims.
But how exactly has Tesco breached EU and UK laws? And, what does this decision mean for workers in the future?
Back in 2018, over a thousand Tesco workers reached out to Leigh Day solicitors. They complained that shop floor staff, most of whom were women, were paid significantly less than warehouse workers. Those working in predominantly male-dominated distribution centres earned £11.00/hr and over. Meanwhile, store staff received just £8.00/hr.
The law firm estimated that this disparity meant that distribution centre workers earned £5000 more a year than their store-based counterparts.
Speaking about the pay-gap, Paula Lee, the lawyer from the Employment Team at Leigh Day, representing some of the Tesco women at the time, said: “In terms of equal worth to the company there really should be no argument that workers in stores, compared to those working in distribution centres, contribute at least equal value to the vast profits made by Tesco which last year had group sales of £49.9bn”.
The firm then went on to lodge the first 1000 equal pay claims and stated that the underpayment of workers could apply to over a quarter of a million Tesco workers. Furthermore, the total bill for underpayment could reach billions of pounds.
The case moved forward when both parties appeared at a preliminary hearing before Employment Judge Manley at Watford Employment Tribunal. The Tesco Action Group, represented by Harcus Sinclair UK Limited alongside Pay Justice, made their challenge under section 66 of the Equality Act 2010.
The challenge argued that the work done by shop floor workers and that done by distribution centre workers was of equal value. Moreover, they added that Tesco should be seen as a single entity regarding employment conditions, as per EU law. Tesco, meanwhile, argued that this did not apply to this case.
The tribunal later heard evidence from both sides, including a job evaluation study developed by Tesco’s Reward Managers in 2014. The study found that 22 hourly-paid store roles were equivalent to higher-paid distribution centre roles. Yet, Tesco later dismissed the research and its findings. Following this, the tribunal ruled that the study was “unreliable”.
Legal representatives of the Tesco employees then appealed this decision.
At Leigh Day’s employment team, solicitor Lara Kennedy accused Tesco of “backpedalling” and “criticising its own study”. Furthermore, she stated: “Tesco see the work done in stores, typically by women, as lesser in value than that done in distribution centres by their mostly male colleagues”.
The employment tribunal reached out to Europe’s highest court, the CJEU in Luxembourg, for legal clarification. The CJEU backed Tesco workers by ruling that Tesco’s pay disparity breached the principle of equal pay and EU legislation.
It said: “The principle, laid down by EU law, of equal pay for male and female workers can be relied upon directly, in respect both of ‘equal work’ and of ‘work of equal value’, in proceedings between individuals”.
According to Leigh Day, this ruling supports the Supreme Court’s ruling earlier this year, which determined that shop workers at Asda can compare their roles with those working in distribution centres.
Kiran Dauka, a partner in the employment team at Leigh Day, said that the CJEU decision had provided much-needed clarity. He explained: “If there is a single body responsible for ensuring equality, the roles are comparable”. Adding: “This means that employers can no longer hide behind the grey areas of UK law. It’s time for supermarkets to accept that the roles of shop floor workers and distribution centre workers are comparable”.
Moreover, the ruling is binding because the case was referred to the European Court in 2019 before the UK formally departed from the EU. This means it will be applied to in future equal pay cases in the UK.
Speaking to Personnel Today, Emily Fernando, senior associate at Harcus Sinclair, commented: “This is another important and promising decision for claimants in the case against Tesco. There is now no legal stone left to turn over on the issue of comparability and Tesco should accept store staff can compare themselves with those working in distribution centres. We look forward to reaching the next stages of this claim and proceeding to a final hearing as soon as possible”.
Despite the ruling, Tesco continues to argue that the two roles are not comparable. Speaking about the verdict, a Tesco spokesperson said: “These roles require different skills and demands which lead to variations in pay – but this has absolutely nothing to do with gender. We continue to strongly defend these claims”.
They added: “We reward our colleagues fairly for the jobs they do and work hard to ensure that the pay and benefits we offer are fair, competitive and sustainable. These claims are extremely complex and will take many years to reach a conclusion”.
Unfortunately, here the spokesperson’s comment on the lengthy nature of the claims is true. Although the ruling is a victory for Tesco workers, it is still unfortunately not the last hurdle they will face.
Reflecting on the recent ruling, Pam Jenkins, a worker at Tesco who has been campaigning for equal pay, said: “To get a judgment confirming shop floor workers can use an easier legal test to compare their jobs to male colleagues in distribution is uplifting”.
She added that while she has always been proud to work at the supermarket chain, the knowledge that male colleagues working in distribution centres earn more is “demoralising”.
“I’m hopeful that Tesco will recognise the contribution shop floor workers make to the business and reflect that in our pay,” she said.
Around 584,000 current workers and an unknown number of former workers could be entitled to back pay of up to £10bn.