The Court of Justice of the European Union (CJEU) has recently confirmed in K and ors v Tesco Stores Ltd that European law has direct effect in equal pay claims involving work of equal value between female workers and their male comparators.

In this case, women employees who worked in Tesco’s retail stores brought tribunal claims arguing that they had not received equal pay for work of equal value compared to male Tesco workers in the distribution centres. They argued that, although they worked in different locations, they were entitled to compare their work because both groups were paid from a “single source”. The failure to pay them equally was contrary to both domestic and European law.

As they wanted specifically to rely on European law, their argument was predicated on Article 157 of the Treaty on the Functioning of the European Union (TFEU) which, following the decision of the European Court in Lawrence v Regent Office, means that women can compare themselves to men who do not work for the same employer as long as the difference in pay can be attributed to “a single source”.

In other words, even if the employees work in different locations, they can still compare themselves as long as they can show that the same employer is responsible for their pay.

In this case, the CJEU held that Tesco Stores “appears to constitute, in its capacity as employer, a single source to which the pay conditions of the workers performing their work in its stores and distribution centres may be attributed and which could be responsible for any discrimination prohibited pursuant to Article 157 TFEU.” This, however, was for the referring tribunal to determine.

In addition, the CJEU confirmed that given the mandatory nature of Article 157 TFEU, the ban on discrimination between male and female workers applied not just to public authorities but also to any collective agreements as well as individual employment contracts.

This decision follows on from the Supreme Court in Asda Stores Ltd v Brierley (weekly LELR 722) in which it held that in order to decide whether comparators in an equal pay case share common terms, tribunals just have to ask whether the terms enjoyed by the claimants were substantially the same as those enjoyed by the comparators.

Caroline Underhill of Thompsons commented that: “This case has confirmed what has long been known – that European law has direct effect in claims of equal pay for work of equal value. This will remain the law unless the Court of Appeal or the Supreme Court decide otherwise in respect of specific case law.”

Thompsons will provide a more detailed summary of the case in due course.

You can read the judgment in full here.