Tesco’s £4bn equal pay case could create ‘tidal wave of litigation’

Employees claim female shopfloor workers earn up to £3 an hour less than male warehouse staff

Almost 100 Tesco employees have launched a group claim asserting that female shopfloor workers earn up to £3 an hour less than male warehouse staff, which – if successful – could lead to up to 200,000 of Tesco’s employees receiving back pay totalling £20,000 per person, according to law firm Leigh Day, their representative.

Large businesses and retailers could have exposed themselves to a “tidal wave of equal pay litigation” if the claim – potentially worth £4bn for Tesco employees – is successful, experts have said, although the details may not be the same in each case.

The group reportedly lodged its claim form with Acas, outlining that Tesco’s hourly paid female store staff earn less than men despite the value of the work being comparable.

The law firm was contacted by more than 1,000 staff and has launched the claim for 100 of them, according to press reports.

Paula Lee, associate solicitor at Leigh Day, said the most common rate for female Tesco employees is £8 an hour whereas for men the hourly rate can be as high as £11, adding that unequal pay had been “hiding in plain sight” at the supermarket.

“We believe an inherent bias has allowed store workers to be underpaid over many years," she said. “There really should be no argument that workers in stores, compared to those working in depots, contribute at least equal value to Tesco’s profits.”

A similar claim was launched against Asda in April 2014, when around 400 female employees brought an equal pay case. In October 2016, Manchester Employment Tribunal ruled that female employees in Asda’s supermarkets could compare themselves to male staff who worked in the retailer’s distribution centres. By this time, around 7,000 former and current Asda employees had brought claims.

The case, also brought through Leigh Day, focused on around £100m in back payments stretching back to 2002. Asda appealed the case to the Employment Appeal Tribunal in August 2017, which dismissed it. 

Crowley Woodford, employment partner at Ashurst, said that if the Tesco employees are equally successful, it could lead to all major retailers and businesses “being exposed to a tidal wave of equal pay litigation”.

He said the Tesco employees who launched the claim were attempting to “capitalise” on the success of the Asda ruling.

Sheila Wild, equal pay expert at the Equal Pay Portal, said the vast claim Tesco is facing should “come as no surprise” to employers. 

“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,” Wild told People Management.

“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. 

“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.”

Sam Smethers, chief executive of women’s rights charity the Fawcett Society, said the claim is the “latest in a long line” of equal value cases

“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." 

A spokesperson for Tesco said: “We are unable to comment on a claim that we have not received. Tesco has always been a place for people to get on in their career, regardless of their gender, background or education, and we work hard to make sure all our colleagues are paid fairly and equally for the jobs they do.”

Further equal pay claims have recently come to light, although they are notoriously expensive and challenging to bring. Up to 200 BBC employees at various levels have complained about pay, according to BBC Women, a campaign group of broadcasters and producers.

The public broadcaster’s former China editor, Carrie Gracie, quit her post last month after 30 years of service and published an open letter on her website citing the BBC’s “secretive and illegal” pay culture as the reason for her exit.

She said that although the public broadcaster had later offered to increase her annual pay from £135,000 to £180,000, this did not guarantee her equality with its male international editors. Jon Sopel, North America editor, for instance, earned between £200,000 and £249,999.