Tesco Faces £4 Billion Equal Pay Claim; Could This Happen to Your Business?

Kate Gardner, Partner in the HR and Employment team at national law firm Clarke Willmott LLP, looks at the Tesco equal pay claim and what it could mean for employers across the UK.

Last week’s news that Tesco may have to pay enormous sums of compensation for failure to provide equal pay for women employed in their stores has caused great concern for employers across the UK.

Since the introduction of the Equality Act in 2010 and the subsequent requirement of gender pay cap reporting, substantial claims have been brought against several large employers in this country.

Could this affect your business?

In 2016 an Employment Tribunal ruled that over 9,000 women working at Asda on checkouts could compare themselves to the higher paid men working in the warehouses. Although Asda is currently appealing the ruling, that still stands.

Therefore, it may no longer be the case that because men and women are undertaking different roles, you as an employer are able to justify paying men more than women. In the Tesco case, the checkout workers are arguing that their job is of equal value to that of the men who have previously claimed they work harder in the warehouses. These women claim that they deal with customers and that is equally demanding mentally and comparable to the physical hard work of handling and loading stock.

But what does the law say?

The Equality Act seeks to define work of equal value. The Tesco workers’ argument could succeed that even though the jobs the men and women are doing are different, they are equal in terms of demands made on that particular worker and therefore should be given equal value.

The Tesco workers argue that the only reason for the pay difference remains a gender reason; historically and continuously the women have been paid and continue to be paid less than the men.

My view is that this is the time to carry out a stringent job evaluation study in your business. You can no longer rely upon a defence that your workers may be carrying out different roles if there is a bias in one area of your business for women to carry out a particular job .For example on a checkout or in the office whilst more men are involved in a more physical role.

Since 4^th April 2017 all businesses with over 250 employees have been required to publish their gender pay gap reports. That pay gap will be based on a snapshot of ordinary pay and bonus pay during the previous 12 months. Hence we have seen all of the reported scandal at the BBC and the subsequent significant changes in pay at that institution.

In time it is proposed that all employers will be required to prepare gender pay reports.

This means that you may already or will need to report on the percentage differences in hourly pay, bonuses and other remuneration packages between male and female employees on a snapshot date.

So the message is clear from this Tesco case, all employers need to consider their work force and their pay arrangements.