Clarification about comparators in equal pay claims


20th July 2021

Recent equal pay decisions have potentially far reaching consequences. The Court of Justice of the European Union (CJEU) recently determined in K and others v Tesco Stores Ltd (Case C-624/19) that Article 157 of the Treaty on the Functioning of the European Union (TFEU) has direct effect where an employee's terms are attributable to a single source (in this case Tesco Stores Ltd) that can rectify any unequal pay terms. This means that employees can compare themselves with an individual who works in a different establishment in a different role.

Case facts

Tesco Stores Ltd employs approximately 250,000 workers in its stores and 11,000 in its distribution centres, all of whom are hourly paid and carry out various jobs.

Approximately 6,000 claimants (both female and male) who work(ed) in its stores brought proceedings before the Employment Tribunal, on the ground that they had not received equal pay for equal work, contrary to the Equality Act 2010 and Article 157 of the TFEU.

Article 157 of the TFEU states:

1. Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied.

2. …Equal pay without discrimination based on sex means…
(b) that pay for work at time rates shall be the same for the same job.

The male claimants’ claims were stayed since the outcome of their claims depended on the outcome of the claims brought by their female colleagues.

The female claimants argued that:

  • their work and that of the male workers in the distribution centres were of equal value; and
  • they were entitled to compare their work and that of the male employees in the distribution centres (although the work is carried out in different establishments), under both the Equality Act 2010 and Article 157 of the TFEU.

They argued that, common terms of employment are applicable in the stores and distribution centres (section 79(4) of the Equality Act 2010) following the recent Supreme Court decision in Asda Stored Ltd v Brierley and others [2021] UKSC 10 in which the Supreme Court determined that workers in stores could compare themselves workers in distribution centres.

Furthermore, there is a single source, namely Tesco Stores Ltd, for the terms and conditions of employment of the female claimants and the male workers in the distribution centres (Article 157 TFEU).

Tesco Stores Ltd argued that there were not common terms of employment, for the purposes of section 79(4) of the Equality Act 2010. Additionally, Article 157 of the TFEU was not directly effective in the context of claims based on work of equal value, and therefore the female claimants could not rely on it. It further argued that that it cannot be classified as a ‘single source’ for the terms and conditions of employment in the stores and the distribution centres.

The Employment Tribunal stayed the proceedings and asked the CJEU whether Article 157 was directly effective in claims of equal value.

Article 86 of the UK-EU Withdrawal Agreement provides that where requests have been made before the end of the transition period (which has now come to an end), the CJEU has jurisdiction to make a preliminary ruling. Article 89 further states that CJEU judgements referred to the CJEU before the end of the transition period, where judgements are delivered after the end of the transition period, are binding.

Consequences

The European Union (Withdrawal Act) 2018 provides EU treaties that confer directly effective rights are retained in UK law after the UK’s withdrawal from the EU.

Generally, UK tribunals and courts are not bound to follow CJEU decisions, however, considering Article 89, there will be very limited scope for a tribunal or court to deviate from this decision.

This case will be of significant interest to employers who have a similar structure to Tesco. This decision, when coupled with the recent Asda decision does make it easier to staff to make comparisons between jobs in different establishments.

That being said, the single source test may be more difficult to satisfy where claimants have different employers within a group structure. In these cases it may be arguable that there is no single source.

If you need advice, or representation, in Employment Tribunals relating to equal pay claims, please contact us.

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