Tesco faces record £4bn equal pay legal challenge

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Tesco equal pay

Legal proceedings have begun in the first equal pay claims against Tesco in what could become the largest ever equal pay challenge in UK history, which could cost the retail giant £4 billion to compensate workers.

Thousands could receive back pay totalling £20,000 if the legal challenge demanding equal pay with men who work in Tesco’s warehouses is successful.

Law firm Leigh Day – who confirmed they have already been approached by over 1000 employees and ex-employees of the supermarket – argue that employees working in the predominantly-male dominated distribution centres are paid considerably more than the largely female-staffed Tesco stores.

The law firm alleges that the work between warehouse and shop floor staff is comparable, and that the disparity could see a full time distribution worker on the same hours earning over £100 a week, or £5000 a year, more than female-based store staff.

Leigh Day also believes the underpayment of workers could apply to in excess of 200,000 Tesco employees.

The firm has already started submitting claims on behalf of their clients through ACAS, the first stage in the Employment Tribunal process which could potentially last several years.

Paula Lee, the lawyer representing the Tesco women, said: “We believe an inherent bias has allowed store workers to be underpaid for many years.

“In terms of equal worth to the company there really should be no argument that workers in stores, compared to those working in distribution centres, contribute at least equal value to the vast profits made by Tesco which last year had group sales of £49.9 billion.”

She added: “According to the latest annual report from Tesco the remuneration package for the chief executive officer and the chief financial officer totalled £7.3 million, yet figures show that Tesco employees are having to claim millions of pounds in working tax credits, paying people fairly benefits the whole of society.”

Tesco has said it worked hard to ensure all staff were paid “fairly and equally”, regardless of their gender or background.

“We are unable to comment on a claim that we have not received,” a spokeswoman said.

“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.”

It’s not the first time a major British retailer has been faced with an equal pay legal challenge.

Leigh Day said it was also currently representing over 20,000 shop-floor workers in equal pay claims against fellow Big 4 retailers Sainsbury’s and Asda, who both face similar legal challenges regarding discrepancies in pay between the male-dominated distribution centres and the mainly female-staffed stores.

The government is also preparing to implement news rules from April whereby businesses with more than 250 employees have to publish annual figures breaking down pay.

As part of the process, businesses must upload a report onto a government website, as well as their own.

The report must detail mean and median gender pay gaps, the proportion of men and women receiving a bonus, and the proportion of men and women in each quartile of the company’s pay structure.

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