Tesco shop workers can look to European law to determine equal pay by comparing themselves with employees working in the distribution centres, after a European Court ruling today (3 June).
The Court of Justice of the European Union (CJEU) ruled that workers can rely directly on equal pay rights set out in European law, over and above domestic law. It said it agreed that Article 157 of the Treaty on the Functioning of the European Union must be interpreted as having direct effect in equal value proceedings.
Equal pay laws have been taken into UK law since Brexit so the European Court’s judgment still holds sway although it remains to be seen to what extent if any Tesco would have to comply with the verdict.
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” –Emily Fernando, senior associate at Harcus Sinclair
The judgment follows a Supreme Court ruling in March that workers from Asda could compare themselves with employees working in its own distribution centres and is the latest victory for Tesco workers in their equal pay fight against the UK’s largest supermarket.
The Asda decision focused on domestic law, whereas the latest ruling was handed down by the European court in answer to written questions in 2019 by Watford Employment Tribunal and agreed between the parties in the Tesco case. Law firm Leigh Day, which represents a large number of the Tesco workers, asked the court to rule on a specific aspect of European law – whether the so-called “single source” test applies to businesses in the UK.
Under EU law, a worker can be compared with somebody working in a different establishment if a “single source” has the power to correct the difference in pay.
The European Court stated that: “Tesco stores appears to constitute, in its capacity as employer, a single source to which the pay conditions of the workers performing their work in its stores and distribution centres may be attributed.”
Kiran Daurka, a partner at Leigh Day, said: “This judgment reinforces the Supreme Court’s ruling that the roles of shop floor workers can be compared to those of their colleagues in distribution centres for the purposes of equal pay.
Equal pay cases
“There are a number of British laws relating to equality which were made when the UK was part of the EU,” she added. “The British parliament has chosen to retain those laws, including ones relating to equal pay, so they still form part of British law.”
It is thought that about 584,000 current UK supermarket workers and an unknown number of former workers could be entitled to back pay at the UK’s four main chains, resulting in a total pay-out of up to £10bn.
The claim against Tesco, which employs approximately 250,000 people in its UK stores, is the largest of the cases, with the action being propelled by the Tesco Action Group with a plethora of law firms and campaigning organisations. The group is championed by Pay Justice, the organisation dedicated to fighting for equality in the workplace, and campaigning law firm Harcus Sinclair UK. The Tesco campaign is part of Harcus Sinclair’s Equal Pay Action initiative.
Emily Fernando, senior associate at Harcus Sinclair, said in response to the ruling: “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.”
Following the decision, Tesco continued to argue that the jobs in its stores and distribution centres were not directly comparable.
“These roles require different skills and demands which lead to variations in pay – but this has absolutely nothing to do with gender,” a spokesperson for Tesco said. “We continue to strongly defend these claims.”
“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,” the spokesperson added.
Company staff quoted in the media disagreed with their employer’s official line, however, with one female worker saying that being paid less than male colleagues had been demoralising.
“I’ve always been proud to work at Tesco but knowing that male colleagues working in distribution centres are being paid more is demoralising,” she said.