Equal Pay Case Could Lead to Surge of Workplace Discrimination Claims

The UK’s biggest retailers could face a wave of equal pay claims after Tesco was accused of unequal pay policies which may leave the grocery giant liable to pay £4bn in compensation back pay for thousands of underpaid employees.

A group of the supermarket chain’s shop assistants and cashiers – who are mostly women – are arguing that they are entitled to the same pay as colleagues who work in Tesco’s distribution centres – predominantly men. Distribution centre workers reportedly earn over £11 an hour, a total of £5,000 a year more than the shop assistants earning £8 an hour.

Tesco is accused of unfairly enforcing a wage difference of up to £3 per hour between what are reckoned to be comparable jobs, with the female-dominated assistant and cashier workforce suffering as a consequence.

While the current claim is being made by just 100 Tesco workers, this disparity in the company’s pay structure is thought to affect around 200,000 workers in all, who might be owed £20,000 each if the law rules in their favour.

The £4bn case against Tesco is the largest ever equal pay case in UK history, and if successful would mark a nationwide turning point for employee pay rights.

Supermarkets defend “legitimate” reflection of market rates in wages

With Sainsbury’s and Asda facing similar claims in recent years, supermarkets have argued that the indirect gender pay disparity in their workforce is simply an effect of the markets and not the fault of the companies.

A spokesman for Tesco said:

“We work hard to make sure all our colleagues are paid fairly and equally for the jobs they do.”

Asda meanwhile continues to dispute action being taken against the company for £100m in compensation for over 7,000 employees. The supermarket maintains that any difference in pay rates between stores and distribution centres is there “for legitimate reasons, including the different market rates for different jobs in different sectors”.

Although awaiting a further hearing at the Court of Appeal, Asda’s legal battle over equal pay has already marked a significant legal boost for campaigning employees, with both an employment tribunal and an appeals tribunal so far upholding that the jobs of shop workers and distribution centre workers are comparable and therefore Asda has a legal duty to pay them equally.

Employers advised to prepare for “tidal wave of litigation”

Tim Roache, general secretary of the GMB trade union, said that the courts’ support for workers in these cases shows that such pay inequality, whether driven by market rates or not, was no longer acceptable by public consensus, and he has called upon employers including Asda and Tesco to “be a market leader in solving this wide-ranging industry problem.”

Experts have warned that such changes if legally upheld could lead to a “tidal wave of litigation” in similar claims of pay disparity between comparable roles that could affect not just supermarkets but large businesses and retailers across all sectors.

Sheila Wild of Equal Pay Portal, however, said that this tidal wave should “come as no surprise” to employers, and that it was their responsibility to follow statutory policy regarding gender pay gaps. “Saying a pay system is ‘fair’ isn’t enough – it also needs to ensure that where women and men are doing equal work, they are treated equally,” she said, adding “A situation where, as appears to be the case here, women are employed on one type of job and men on another, but the men are getting a higher rate of pay, is exactly the kind of thing equal value is aimed at.”

She continued:

“Employers should follow advice laid out in the statutory code of practice on equal pay and carry out an equal pay audit, with a view to identifying where women and men are doing equal work and ensuring that, wherever they are, they get equal pay.”

Sam Smethers, the chief executive of women’s rights charity the Fawcett Society, has echoed this advice to employers, urging: “The law says women are entitled to equal pay for doing the same job or for work of equal value. As employers review their pay systems they should address any pay inequality they find.”

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