Tesco staff ask EU to clarify equal pay legislation
In what is the latest development in the long running equal pay dispute between Tesco shop workers and supermarket bosses, Leigh Day, the firm representing the workers, has applied to the EU Court of Justice (ECJ) for equal pay clarification. If they agree to assist, the ECJ’s stance could have a significant impact on how UK courts interpret equal pay claims in the future.
The firm, who are representing thousands of predominately female shop workers, have asked the ECJ to clarify if these individuals have a right to an equal pay claim, using predominately male warehouse staff as their comparators. In particular, Leigh Day would like the Court to confirm whether staff in one area of a business, can compare their salaries to those in another sector.
Tesco argue that the shop workers’ equal pay claim is invalid as both parties are independent of each other and different sectors of the business are responsible for both the terms and conditions of employment in stores and distribution centres.
Existing equal pay legislation in the UK is derived from the Equality Act 2010, whilst additional practical guidance for employers is provided under the Equality and Human Rights Commission’s Code of Practice on Equal Pay. Under the Act, it is unlawful to pay a women less than a man in the 'same employment' when they are engaged in like work, work rated as equivalent or work of equal value.
It is usually necessary for the woman and the male comparator to work for the same private employer in order to bring an equal pay claim. Whereas, in the public sector an equal pay claim may be accepted where the woman and the man work for different employers but their pay is determined by a single source. Therefore, it will be interesting to see if the ECJ succeed in providing clarity to this situation.
As mentioned earlier, the ECJ’s response could set an important precedent for future equal pay disputes, as well as those already ongoing. Tesco’s supermarket rivals Asda, Sainsbury’s and Morrisons are also facing similar equal pay claims from shop floor staff, which could result in a combined estimated pay out of £8bn.
A ruling in favour of the shop workers could set alarm bells ringing for a number of large employers across the UK who have staff operating in different arms of the business. These employers could find themselves inundated with equal pay claims from staff, who may have previously felt unable to bring a claim, forcing them to rethink pay practices across the organisation.
Having said this, even if a female employee is paid less than a male comparator for working in the same employment, employers will still be protected from equal pay claims if they can show that the difference is due to a 'material factor' which does not discriminate against the woman because of her sex. Examples of material factors include length or service, different hours of work or pay protection following a job-regrading exercise.
In any event, employers should keep a close eye on the developments of this equal pay dispute and examine their own pay practices to ensure that they have a strong position for justifying any existing pay rates.