Tesco Extra Wages: ECJ supports equal pay for Tesco store workers

June 22, 2021

3 min read

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What's going on here?

The European Court of Justice has clarified that an EU law can be relied upon by Tesco store workers who are bringing a case in the UK against their employer for equal pay.

What does this mean?

Tesco store workers have not received equal pay for work they argue is of equal value with colleagues in its distribution centres. Since the mostly female store workers are receiving on average £3 per hour less than the mostly male distribution centre workers, there are strong grounds for arguing Tesco have breached EU and UK laws on sex discrimination.

This ECJ ruling clarifies one aspect of European Law on which the equal pay claim is being argued: the single-source test, whereby 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. Since Tesco is the same employer of both the store and distribution workers, they would be a single source under this test and the ECJ ruled that this test should apply in the UK.

Back in 2019, Littlelaw published an article explaining how this Tesco equal pay claim would work and what legal test needs passing – click here to read it. In sum, if the roles are comparable and of equal value, then there has to be a reason other than sex discrimination to justify the difference in pay.

Critically, this news follows the Supreme Court decision from March 2020 ruling in favour of equal pay for Asda store workers. Therefore, the ECJ’s ruling on the single-source test for Tesco reinforces the Supreme Court’s interpretation of the comparability test in the Asda case. It is now clear that the roles are comparable if there is a single body that can ensure equal pay between them.

What's the big picture effect?

These two decisions combined make it almost inevitable that Tesco store workers will (eventually) be able to recover the difference in pay for the hours they worked. However, the system by which a Tesco store worker would be able to recover that difference is still irksome. Current employees would need to begin their claim in the Employment Tribunal. Former employees could also recover back-pay from work completed within the last six years via a similar filing in the High Court. However, filing each worker on their own individual claim form for thousands of store workers inflicts an administrative burden on the court system. The increase in these group litigations could force a wider reform of how large-scale claims are handled.

Similar equal pay claims are also ongoing against Morrisons, Sainsbury and Co-op. In fact, if all of these retailers lost their equal pay claims, they would be forced to pay an estimated £8bn in damages. This precedent may extend to gender equality more broadly where a majority of women carry out a certain role in other businesses. Employment lawyers for other big employers may advise their clients to review their pay structures that include historically gendered roles and realign them before any mass claims are made.

Though the aisle is clearing for Tesco store workers to receive their equal pay compensation, do not discount future claims against other supermarkets or within other sectors seeking to rely on this legal precedent.

Report written by Seb Stacey

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