Supermarkets in the UK have suffered another blow in the battle for equal pay after the Court of Justice of the European Union today ruled employees working in stores can compare their roles to colleagues working in distribution centres.
The ruling means thousands of women are one step closer to an equal pay victory after claiming that they have been underpaid for decades.
Before the UK left the EU, the CJEU was asked whether part of European law could be relied upon by people in the UK making equal value claims against their employer.
Under EU law, a woman can compare their role to that of a man’s working in a different establishment if a ‘single source’ has the power to correct the difference in pay.
The CJEU said the answer is yes: “Where such pay conditions can be attributed to a single source, the work and the pay of those workers can be compared, even if they work in different establishments,” it said.
The ruling arises from a question that was referred to the CJEU from the Tesco equal pay case.
The Court 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, meaning Tesco workers can look to European law when seeking to compare themselves with employees working in the distribution centres for the purposes of determining equal pay.
The Court also commented 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.’
It is estimated that as many as 584,000 current supermarket workers and an unknown number of former workers could be entitled to back pay at the UK’s four main supermarkets, resulting in a potential total pay-out of up to £10bn.
The biggest claim is against Tesco, which employs approximately 250,000 people in its UK stores.
Law firm Leigh Day represents more than 50,000 supermarket shop floor workers, most of whom are women.
They claim they are paid unfairly in comparison to distribution centre colleagues, most of whom are men.
Pam Jenkins, who works at Tesco, 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 up lifting.
“I’ve always been proud to work at Tesco but knowing that male colleagues working in distribution centres are being paid 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.”
Christine Sepahi worked for Tesco for over 25 years and sits on the Tesco Action Group committee.
She said: "We’re pleased that The Court of Justice of the European Court has supported the Supreme Court ruling and we hope this is another step in bringing justice and parity to thousands of store workers whose work has been shamefully undervalued by Tesco for so many years."
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Kiran Daurka, a partner in the employment team 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.
“For a long time, employers have argued that UK law in this area is unclear, but this judgment is simple, if there is a single body responsible for ensuring equality, the roles are comparable.
“Clarification from the CJEU confirms that this single source test can be relied upon by people in the UK bringing an equal value claim. 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.”
Workers at several other chains, including the Co-Operative argue the same although earlier in the year, the Supreme Court ruled that Asda shop floor workers can compare their roles to those of their colleagues in distribution centres for the purposes of equal pay.
The Tesco Action Group, which oversees the campaign for workers' rights, estimates as many as 25,000 female employees may be owed money back after being underpaid for years.
It alleges that store workers - who are predominantly women - were paid up to £3 an hour less than warehouse and distribution centre workers who are predominantly men.
The group - which comprises of both current and ex workers - claims that Tesco breached its duty under section 66 of the Equality Act 2010.
It argues the difference in hourly pay for a shop floor worker and those in a distribution centre can range between £1.50 to £3 an hour, which could mean a disparity in pay of many thousands of pounds.
Leigh Day believes the average worker could be entitled to in excess of £10,000 for up to six years back pay. This is equivalent to £10,000 each.
Lara Kennedy at Leigh Day, said: "This is a highly unusual scenario where Tesco is now backpedalling and criticising its own study.
"Having looked at the legislation and carefully analysed the case law, we believe the 2014 study, designed, developed and scored by Tesco’s own Reward Managers, to be a job evaluation study that can be relied upon by its store workers.
"We argue that the only reason shop floor workers have not been paid equally is because, despite their own study telling them otherwise, 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 'Tesco Equal Pay Map of the UK' above breaks down UK cities by area post code, detailing the number of Tesco stores within each city, approximate employee numbers and corresponding claim values.
Outside of London, it estimates that Tesco’s 5,800 current and former workers could stand to receive a total of £58million, closely followed by Glasgow at £56million and Cardiff at £54million.
Tesco previously told Mirror Money that it "strongly defends the claims".
“We work hard to ensure that we reward our colleagues fairly for the jobs they do. The pay in our stores and in our distribution centres is the same for colleagues doing the same jobs regardless of gender," a spokesperson said.
“There are fundamental differences between the jobs in our stores vs those in distribution centres.
"These differences, in skills and demands, as well as the different markets in which they operate, do lead to variations in rates of pay between stores and distribution centres – but these are not in any way related to gender. We will strongly defend these claims."
What constitutes an equal pay claim?
The Equal Pay Act was introduced in 2010 to protect workers from being unfairly discriminated against in the workplace.
It states that both men and women should be paid equally where they are doing the same job - making it illegal for firms to pay them differently without significant reason.
In the eyes of the law, to make a claim, the worker must be able to show that their jobs are both equal - in terms of demands such as effort, skill and decision making.
