European law applies to Tesco equal pay case, court rules

Employees closer to winning claim over pay as EU rules that work done in different locations can be compared if there is a ‘single source’ for the terms of employment 

Tesco employees are a step closer to victory in their equal pay claim against the supermarket, after European court rules that EU law can be relied upon.

The Court of Justice of the European Union (CJEU) said the ‘single source’ test under EU law, does apply to UK businesses. This is where work done in different locations can be compared for the purposes of equal pay if there is a ‘single source’ for the terms and conditions of employment.

Thousands of Tesco staff, mostly women, brought the case to tribunal arguing they are not being paid equally for work of equal value compared to colleagues, mostly men, who work in the supermarket’s distribution centres.

The CJEU ruled on the issue after a 2018 Watford Employment Tribunal referred the question around ‘single source’ to it.

The court said the law had a “direct effect in proceedings” and was therefore a legitimate line of argument which the Tesco employees could use in pursuing their equal pay claims.

It added that because Tesco was the “single source” of the terms and conditions for both them and the distribution centre workers, their work can be compared under EU law despite them working in different locations.

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Kiran Daurka, a partner at Leigh Day, the firm representing the Tesco workers, said the judgement from the CJEU reinforced an earlier decision by the Supreme Court, which ruled that the role of Asda shop floor workers could be compared to its distribution centre workers when considering equal pay. (The Asda case is still ongoing.)

Daurka added that the CJEU’s ruling could have a wider impact on UK businesses and said employers could “no longer hide behind the grey areas of UK law”.

“For a long time, employers have argued that UK law in this area is unclear, but this judgement is simple, if there is a single body responsible for ensuring equality, the roles are comparable,” she said.

However, Jeremy Coy, associate at Russell-Cooke, said this ruling was not a “final victory” for the Tesco employees.

“The court simply found that supermarket workers, who are predominantly female, can compare themselves for the purposes of equal pay to workers in distribution centres, who are predominantly male, as Tesco is a single entity despite employing workers in different locations,” he said.

Coy added that, despite the UK no longer being part of the EU, the CJEU’s judgement will still be binding for UK employment tribunals and courts going forward because it was referred to the European court before the UK formally left the EU.

A spokesperson for Tesco said the company would continue to strongly defend against these claims.

“The jobs in our stores and distribution centres are different. These roles require different skills and demands which lead to variations in pay – but this has absolutely nothing to do with gender.

“We reward our colleagues fairly for the jobs they do and work hard to ensure that the pay and benefits we offer are fair, competitive and sustainable,” they said.