Tesco faces record £4bn equal pay claim

Tesco is facing what may turn out to be Britain’s largest ever equal pay claim, which could cost the supermarket giant up to £4bn.

Leigh Day, the law firm acting on behalf of those bringing the claim, said that the underpayment of workers could apply to more than 200,000 Tesco employees. Estimated pay shortfalls could be as high as £20,000.

The firm said that it had already started submitting claims on behalf of clients through the Government’s Advisory, Conciliation and Arbitration Service – or Acas. That marks the first stage in the Employment Tribunal process.

The lawyers’ case rests on the argument that employees working in Tesco’s predominantly male-dominated distribution centres are paid considerably more than the largely female-staffed stores. Those in the distribution centres may earn in excess of £11 an hour whereas the most common pay grade for store staff is around £8 per hour, Leigh Day said.

It said that anyone – female or male – who has worked at a Tesco store in England, Northern Ireland or Wales in the last six years, or Scotland in the last five years, is eligible to make a claim.

Those who have worked for Tesco for more than six years may be entitled to the maximum amount of back pay.

“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 female based store staff,” the firm said, adding that it had already been approached by over 1,000 employees and ex-employees of the supermarket about the issue.

In addition to the Tesco claim, Leigh Day is currently representing over 20,000 shop-floor workers in equal pay claims against Sainsbury’s and Asda. Both face similar claims of discrimination between the pay in male-dominated distribution centres and the mainly female-staffed stores.

“We believe an inherent bias has allowed store workers to be underpaid for many years,” said Paula Lee, the lawyer from Leigh Day’s employment team representing the female Tesco workers.

“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 £49.9bn,” she added.

Ms Lee said that, according to Tesco’s latest annual report, the remuneration package for the chief executive and chief financial officer totalled £7.3m, “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”.

Under new regulation, all UK companies employing at least 250 people will have to publish a full gender pay gap report by early April this year.

A spokesperson for Tesco on Wednesday said that it was unable to comment on a claim that it had not received.

“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,” the spokesperson added.