On 3 June 2021, the Court of Justice of the European Union (CJEU) ruled that Tesco shop workers can directly rely upon European Law, over and above domestic law, in equal pay claims, by using employees working in the supermarket’s distribution centres as their comparators. This judgment reinforces the Supreme Court’s decision from earlier this year, where it was held that Asda shop workers were permitted to use the same terms and conditions of employment enjoyed by the warehouse staff as a valid comparison.
Thousands of shop workers, most of whom are women, brought a claim against Tesco, arguing they had failed to receive equal pay for work of equal value against colleagues, who are mostly men, in the supermarket’s distribution centres, which they alleged breached UK and European laws. Following tribunal proceedings in 2018 and prior to the UK formally leaving the European Union, the matter was referred to the CJEU, where clarification was sought on whether the so-called "single source" test, a specific aspect of European law, was applicable to businesses in the UK. This test would allow a worker to be compared with someone working in a different establishment if a "single source" had the power to correct the difference in pay.
In their ruling, the CJEU confirmed that the test could be relied upon in this case and the work compared for equal pay purposes. Tesco was the single entity responsible for implementing the terms and conditions for both the shop workers and distribution staff, despite them working in separate geographical locations. Furthermore, it was held that Article 157 of the Treaty on the Functioning of the European Union could be interpreted as having 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.
This decision was welcomed by Leigh Day, the law firm representing the shop workers, who stated that employers could “no longer hide behind the grey areas of UK law… this judgement is simple, if there is a single body responsible for ensuring equality, the roles are comparable,”. In their response however, Tesco have indicated they will continue to defend the claim in the national courts and dispute that the roles are in fact directly comparable, given they both have different demands and skillsets, and remunerate their staff fairly in accordance with that.
However, despite the perceived clarity brought about by CJEU ruling, due to the complexity of the claims brought against Tesco, it will likely be some time before any conclusion can be reached. Law At Work will continue to keep you updated with any developments as and when they occur.