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Shopfloor staff, most of whom are women, accuse Britain’s biggest grocer of paying them up to £3 per hour less than the mostly male warehouse employees, when their work is of equal value. Yesterday’s decision could trigger more than £2.5billion in back pay claims for as many as 25,000 mostly female employees, who may be owed compensation after being underpaid for at least seven years.
Around 6,000 current and former workers argued that Tesco should be seen as a single entity in terms of employment conditions, in line with EU law. Tesco claimed the law was not applicable in the UK.
Now, Europe’s top court has rejected Tesco’s arguments and ruled the law applies to private UK businesses as well, in a decision that could affect other retailers.
Kiran Daurka, a partner in the law firm Leigh Day, which represented the Tesco employees, 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.”
The decision was sent to the European Court of Justice (CJEU) for clarification after first being heard at an employment tribunal in Watford, and is thought to be one of the last major decisions by the EU in relation to UK employment law before changes brought by Brexit take hold.
CJEU judges said: “The principle, laid down by EU law, of equal pay for male and female workers can be relied upon directly, in respect both of ‘equal work’ and of ‘work of equal value’, in proceedings between individuals.”
The decision, which is final, will bind the UK Government and apply to any future equal pay case despite Britain leaving the EU, Leigh Day said. Ms Daurka added: “There are a number of British laws relating to equality which were made when the UK was part of the EU.
“British Parliament has chosen to retain those laws, including ones relating to equal pay, so they still form part of British law.”
In a statement after the case, Tesco maintained the jobs in its stores and distribution centres were different.
“These roles require different skills and demands which lead to variations in pay – but this has absolutely nothing to do with gender. We continue to strongly defend these claims.”
But one of the company’s employees said the decision was uplifting, and being paid less than male colleagues had been demoralising.
Pam Jenkins added: “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 shopfloor workers make to the business and reflect that in our pay.”
In March, more than 44,000 Asda workers won a similar equal pay claim with bosses through a Supreme Court ruling, paving the way for legal battles that could last years.
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