Tesco warns equal pay would cause 'serious damage' to business
The supermarket giant faces an equal pay dispute covering six years between 2012-2018 brought on behalf of 60,000 employees
Paying store workers the same amount as warehouse staff risks causing "serious damage" to business and would ignore "economic reality", Tesco has claimed.
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The supermarket is defending itself against claims that shop workers earn less than employees at its distribution centres.
The case is entered on a disparity which can see store workers earn up to £5.50 an hour less than their colleagues in warehouses.
Bosses made the argument at an employment tribunal in Reading on Friday.
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The claim stretches back to 2018 and involves 60,000 Tesco workers who are seeking six years of pay between 2012-2018.
According to Leigh Day, which represents around 17,000 current and former employees, the value of the claim could be £4 billion.
Tesco said the potential cost could be £1.7bn across 250,000 workers.
Most store employees are women, while around 90 per cent of those working in the distribution network are men.
At the tribunal Tesco said the pay gap was due to "material" factors rather than gender.
In written submissions the supermarket said the case was "extraordinary" and that the pay gap reflected market conditions and “genuine pressing operational needs”.
The supermarket added the pay structure was shaped by business concerns which were necessary for it to remain “viable, competitive and able to continue employing hundreds of thousands of colleagues across the UK”.
It warned that ruling against it could lead to major disruption including industrial action among warehouse worker and lead to some staff being paid more than their managers.
Tesco said in its submission: “Tesco submits that, the law not being an ass, this is not an outcome that should ever be reached. But this is that for which the Claimants nonetheless contend.”
Leigh Day employment partner Paula Lee said: “Our clients’ case is that those markets are not neutral or external forces operating beyond Tesco’s control.
“It is alleged that Tesco had substantial influence over how pay was set and operated within a system that it helped shape over many years.”
The hearing is expected to last five weeks, with a decision due later this year.
It is just one of several equal pay disputes in the retail sector, with Asda, Morrisons and Next also facing claims centred on the difference between shop floor and distribution salaries.
An equal pay case against Morrisons started this week in Leeds, while Next is also challenging parts of an unfavourable 2024 ruling.