Monday, 10 December, 2018

United Kingdom retailer 'Tesco' Faces $5.6 Billion Claim Over Unequal Pay for Women

The UK supermarket chain is facing a hefty set of claims over unfair pay. Phil Noble  Reuters The UK supermarket chain is facing a hefty set of claims over unfair pay. Phil Noble Reuters
Nellie Chapman | 08 February, 2018, 04:55

Tesco is at the centre of an equal pay claim that could cost the supermarket giant up to £4bn in payouts to its, predominantly female, shopfloor staff.

Tesco could face a £4bn hit if the claims are successful. However, it is likely to be bogged down in the courts for years.

Tesco is Britain's biggest retailer and its largest private sector employer with a staff of over 310,000.

Legal firm Leigh Day has launched action against the company on behalf of shop assistants who claim they are paid up to £3 an hour less than their male warehouse workers.

Unequal pay for men and women is now a hot topic in Britain's boardrooms and corridors of power.

This disparity in pay amounts to men earning, on average, 100 pounds more per week, and up to 5,000 pounds more each year.

At the same time, Greg Clark the Business Secretary of Britain said he was surprised by the size of the claim made against Tesco.

But a spokesman added: "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".

Tesco's shares were down 0.8 per cent at 9:50am in London on Wednesday.

The disparity between pay for the two roles could see a full-time distribution worker earning more than £100 a week - £5,000 a year - more than shop workers.

"We believe an inherent bias has allowed store workers to be underpaid for many years".

The Tesco case follows similar claims by Leigh Day against two other United Kingdom supermarket operators - Walmart's Asda and Sainsbury.

"According to the latest Annual Report from Tesco the remuneration package for the Chief Executive Officer and the 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", she said.

It claims the case could lead to compensation payments of £4 billion.

Tesco is particularly exposed because of its size as well as a recent push to put thousands more staff on its shop floors in a bid to soften its hard-nosed image among United Kingdom consumers. Asda is due to appeal against the ruling in October. It argues the demands of jobs in stores and depots are very different and it pays market rates.

Similar earlier actions alleging pay inequality are being pursued against Tesco's competitors, Asda and Sainsbury's and are going through the employment tribunal process.