Earlier this month it was announced that legal proceedings have begun in the first equal pay claims against Tesco in what is potentially the largest ever equal pay action in UK history. It has been reported that the underpayment of workers could apply to more than 200,000 Tesco employees and estimated shortfalls could reach £20,000 for each employee, all together costing a staggering £4bn for the supermarket.
Equal pay legislation implements the principle that men and women should receive equal pay for equal work. Under the Equality Act 2010, the claimant must compare themselves against an actual employee of the opposite gender undertaking equal work and working in the same employment.
The Tesco case mirrors the Asda case (read more here) by resting on the argument that employees working in Tesco’s predominantly male-dominated distribution centres are paid considerably more than the largely female staffed stores. Those working in distribution centres earn in excess of £11.00 an hour whilst the most common grade for store staff sees them receive around £8.00 an hour. This disparity could see a full time distribution worker on the same hours earning over £100 a week, or £5,000 a year more than female based store staff. The argument shines light on the work of equal value point, where a woman can claim ‘equal work’ with a man if she can show that her work is of equal value in terms of the demands made on her. Meaning the job can be different, but efforts, conditions and training involved is similar.
The claims, which are in the first stage of the tribunal process, follow recent high profile news stories involving equal pay and gender pay gaps in the public and private sector. The intense media interest and the increased scrutiny around gender pay, along with the abolishment of tribunal fees, means that there is an ever-increasing risk of these types of claims. Employers must take steps to eradicate any inequality in pay as, since the Asda case, there is reduced scope for employers to argue that the identified comparators are unsuitable.