Thousands of former and current shop-floor employees at the UK’s biggest retailer argued colleagues in the distribution centres, who are mostly men, got paid more than them for the same work.
The predominately female workers claimed Tesco had under-paid them and breached European Union and UK laws.
As the UK officially left the EU on 31 January 2021, both Tesco and Leigh Day, the law firm representing the workers, went to the European Court of Justice to assess what laws had been broken.
Under EU law, a worker can be compared with somebody working in a different establishment if a single source has the power to correct the difference in pay.
The European court of Justice ruled Tesco could be classed as the single source and that it had breached EU Law and the principle of equal pay.
The ruling in favour of Tesco shop-floor workers, follows the judgment in March this year in favour of Asda shop-floor workers and could result in £2.5 billion in backdated pay claims.
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Matt Jenkin, partner and head of employment law at Moorcrofts, told HR magazine the decision should be a stark reminder to businesses that they can't underpay their female staff.
He said: “The European Court decision that the single source test applies to equal pay decisions in the UK is significant and will undoubtedly be welcomed by workers and their representatives who are pursuing equal pay claims.
“Whilst it will make it easier to pass the initial hurdle for many equal pay claims it is by no means the end of the line in those claims.”
Camilla Beamish, legal director at law firm Cripps Pemberton Greenish, told HR magazine the Court's dismissal of Tesco’s argument that the EU principle defining equal pay for equal work or work of equal value was not applicable, will define future cases.
She said: "This judgment leaves little uncertainty and demonstrates the Court’s firm hand with regard to equal pay claims.
"Despite Tesco remaining adamant that they remunerate their staff fairly, the impact of this ruling will now make it even harder for businesses to justify paying their female and male staff differing rates for work of equal value."
In addition, Beamish said given the overwhelmingly high profile of both Asda and Tesco, it is hoped that these recent judgments will set a precedent for other private sector businesses.
"Hopefully it will encourage them to urgently review their remuneration structures and equality policies," she said.
