Tesco faces record equal pay claim

Supermarket group Tesco is facing a potential bill of up to £4 billion in a record equal pay claim involving mainly women workers at its British stores, according to the law firm pursuing the case.

If the claim is successful it could have huge implications for British industry. However, it is likely to be bogged down in the courts for years.

Tesco is Britain’s biggest retailer and is the largest private sector employer, with a workforce of more than 310,000 staff.

Law firm Leigh Day said on Wednesday that the mainly male employees in Tesco’s distribution centres were paid considerably more than its largely female store workers.

The law firm is also working on claims against supermarket rivals Asda, the British arm of Walmart, and Sainsbury’s, which date back to 2012 and 2015 respectively.

Unequal pay for men and women is currently a hot topic in Britain’s boardrooms and corridors of power. The resignation last month of Carrie Gracie as China Editor for the BBC led to an investigation into pay differences at the public broadcaster.

British Business Secretary Greg Clark told Sky News he was “surprised” by the scale of the claim against Tesco.

A Tesco spokesman said the firm had not yet received a claim.

“Tesco has always been a place for people to get on in their career, regardless of their gender, background or education, and we work hard to make sure all our colleagues are paid fairly and equally for the jobs they do,” he said.

Leigh Day operates on a no win, no fee basis and takes 25 per cent of any compensation obtained by its clients.

The law firm said Tesco distribution centre staff may earn in excess of £11 an hour, while the most common grade for store staff saw them receive around £8 per hour. This disparity could see a full-time distribution worker on the same hours earning over £100 a week – or £5,000 a year – more than store staff.

Leigh Day said that more than 200,000 Tesco employees may be underpaid and estimated shortfalls could reach £20,000 each, meaning the potential bill for Tesco could be as high as £4 billion.

The law firm said it had already started submitting claims on behalf of its clients through conciliation service ACAS, the first stage in the Employment Tribunal process, and had been approached by over 1,000 current and former Tesco employees.

Crowley Woodford, employment partner at law firm Ashurst, said if the Tesco employees’ claim was successful “all major retailers, and indeed businesses more generally, could be exposed to a tidal wave of equal pay litigation.”

In 2012, Birmingham city council agreed to pay about £1 billion to settle the claims of tens of thousands of women workers.

Last August, Britain’s Employment Appeal Tribunal backed an October 2016 ruling that Asda workers in shop floor roles could compare their jobs with those done for higher wages in warehouses. Asda is taking the case to the court of appeal in October.

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