The European Court of Justice gives Tesco employees the green light to rely on EU law and compare themselves with colleagues in different locations

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Tesco store employees have picked up the mantle of their Asda colleagues in the fight for equal pay. Following the recent judgment of the European Court of Justice (ECJ) in K and Others v. Tesco Stores Ltd that they can rely directly on EU law, female Tesco employees are a step closer in their claim that they are entitled to receive equal pay to their colleagues, mostly men, who work in Tesco’s distribution centres.

Case background

Tesco has found itself in the middle of a large equal pay case with thousands of its current and former (mainly female) store employees, claiming that they should receive equal pay to their colleagues in the distribution centres. The Equality Act 2010 provides that men and women should receive equal pay for equal work. Employees can compare themselves with a comparator of the opposite sex who is performing either the same work or work of equal value. Tesco claimants are seeking to rely on EU law that would allow them to claim 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. The Equality Act does not contain this "single source" test.

Tesco disputed that the female claimants had any right to compare themselves with male workers in its distribution centres because (a) there are no common terms of employment and (b) the EU "single source" test does not apply in the UK. The Watford employment tribunal deferred to the ECJ.

The ECJ confirmed that the Tesco store employees can rely directly on the EU "single source" test, meaning that the Tesco claimants have overcome this initial hurdle and can continue with their equal pay claim using the distribution workers as their comparators. However, the Tesco employees have a long way to go before they succeed in their equal pay claim. The claim now goes back to the Watford employment tribunal to decide whether the roles in-store and in the distribution centre are of equal value and, if so, whether the difference in pay is attributable to a material factor that is not gender discriminatory.

What does this mean for UK employers?

The judgment is binding because it went to the ECJ prior to the UK leaving the EU. The decision potentially makes it easier for claimants to bring equal pay claims using comparators based in different locations. The EU "single source" test can be used where there is one employer responsible for setting pay.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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