The European Court of Justice has ruled that pay for staff on the shop floor can be compared to remuneration received by employees working in the distribution centres.

This next step in the case can be compared to that of Asda’s recent case where the Supreme Court ruled that shop-floor staff and distribution centres workers were comparable.

This legal action was first brought against Tesco in 2018 as estimates reveal that around 25,000 female employees were underpaid and therefore could be liable for compensation due to a breach of the Equality Act 2010.

Tesco Action Group claim that female store workers were paid up to £3 less per hour than employees who worked in the warehouse and distribution centre, most of these employees being men.

A study carried out by Tesco in 2014 concluded that these employees should have been paid the same rate, regardless of gender, as the 22 store roles were equal to distribution centre roles.

In this most recent development of the case, the court stated that EU rules which guaranteed equal pay for men and women could be utilised in this dispute.

However, Tesco and Leigh Day (the law firm representing Tesco workers) have asked the Court for further clarification regarding the “single source” aspect of the law.

This is due to the slight difference between UK and EU law. Domestic legislation indicates that employees have to prove that they are in the “same employment” as their comparator – as Asda workers successfully proved.

However, EU law states that a worker can be compared with somebody working in a different establishment if a “single source” has the power to correct the difference in pay.

Kiran Dauka, Partner in the Employment team at Leigh Day, said that this has been proven by the CJEU’s ruling:

This judgement 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.

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

Clarification from the CJEU confirms that this single source test can be relied upon by people in the UK bringing an equal value claim. This means that employers can no longer hide behind the grey areas of UK law.

However, Tesco have refuted this, maintaining their stance that the shop-floor and distribution centre roles are different:

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.

These claims are extremely complex and will take many years to reach a conclusion. We continue to strongly defend these claims.