[Equal Pay for Equal Work] ECJ holds TESCO stores are single-source/employer for its different distribution centers; pay gap between workers of a different sex can hit by EU laws

European Court of Justice (ECJ): The Second Chamber composed of A. Arabadjiev, President of the Chamber, A. Kumin, T. von Danwitz (Rapporteur), P.G. Xuereb and I. Ziemele, JJ., held that Tesco’s work conditions might be gender discriminatory with regards to equal pay for equal work. The Bench clarified,

“The pay conditions of workers of different sex performing equal work or work of equal value can be attributed to a single source comes within the scope of Article 157 TFEU and that the work and the pay of those workers can be compared on the basis of that article, even if they perform their work in different establishments.

The request had been made in proceedings between approximately 6000 workers and Tesco Stores Ltd., which employs or employed those workers in its stores, concerning a claim for equal pay for male and female workers.

Legal context

EU law: Provisions relating to the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union The Court of Justice of the European Union shall continue to have jurisdiction to give preliminary rulings on requests from courts and tribunals of the United Kingdom made before the end of the transition period.

Article 119 of the European Economic Community (EEC) Treaty (which became, after amendment, Article 141 EC, now Article 157 of TFEU (Treaty on the Functioning of the European Union) was worded as follows:
Each Member State shall during the first stage ensure and subsequently maintain the application of the principle that men and women should receive equal pay for equal work.

Article 157 TFEU provides:
Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied.

The Dispute in the Main Proceedings and the Questions Referred for a Preliminary Ruling

Tesco Stores is a retailer that sells its products online and in 3 200 stores located in the United Kingdom. The stores, of varying size, have a total of approximately 250 000 workers, who are hourly paid and carry out various types of jobs. The company also has a distribution network of 24 distribution centres with approximately 11 000 employees, who are also hourly paid and carry out various types of jobs.

The claimants in the main proceedings were female employees or former employees of Tesco Stores, who brought proceedings against Tesco Stores before the Watford Employment Tribunal (United Kingdom), from February 2018 onwards, on the ground that they had not received equal pay for equal work, contrary to the Equality Act 2010 and Article 157 TFEU. In support of their equal pay claims, the claimants submitted that their work and that of the male workers employed by the company in distribution centers were of equal value and, that they were entitled to compare their work and that of those workers under both the Equality Act 2010 and Article 157 TFEU, although the work was carried out in different establishments.

The company disputed that the claimants had any right to compare themselves with the male workers at the distribution centers in its network, on the ground that there were not common terms of employment, for the purposes of section 79(4) of the Equality Act 2010. The company further argued that Article 157 TFEU was not directly effective in the context of claims based on work of equal value, and therefore the female claimants could not rely on that provision. Similarly, the Tesco Stores contended that it cannot be classified as a ‘single source’ for the terms and conditions of employment in the stores and the distribution centers in its network.

Findings of the Tribunal

The referring Tribunal stated that the female claimants in the main proceedings and the male workers taken as comparators, although employed in different establishments, had the same employer. In order to determine whether the jobs of the female claimants were of equal value to those of their comparators, the referring Tribunal observed there was uncertainty within UK Courts regarding direct effect of Article 157 TFEU, in particular with the distinction articulated in Defrenne (43/75, EU:C:1976:56), between discrimination which may be identified solely with the aid of the criteria based on equal work and equal pay and discrimination which can only be identified by reference to more explicit implementing provisions of EU or national law.

Question Referred

  1. Is Article 157 [TFEU] directly effective in claims made on the basis that claimants are performing work of equal value to their comparators?
    2. Is the single source test for comparability in [Article] 157 [TFEU] distinct from the question of equal value, and if so, does that test have direct effect?

In other words, whether Article 157 TFEU must be interpreted as having direct effect in proceedings between individuals in which failure to observe the principle of equal pay for male and female workers for ‘work of equal value’ that the criterion of ‘work of equal value’, unlike the criterion of ‘equal work’, requires definition by provisions of national or EU law. Furthermore, whether the findings of the Court Defrenne (43/75, EU:C:1976:56), when work of equal value is being compared, is founded on a claim of discrimination that is identifiable only by reference to provisions more explicit than those of Article 157 TFEU?

Analysis and Findings of the ECJ

According to Article 157 TFEU, each Member State is to ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied. Therefore, it imposes an obligation to achieve a particular result and is mandatory as regards both ‘equal work’ and ‘work of equal value’. Thus, the Court remarked,

“Since Article 157 TFEU is of such a mandatory nature, the prohibition on discrimination between male and female workers applies not only to the action of public authorities but also extends to all agreements which are intended to regulate paid labour collectively, as well as to contracts between individuals.”

In Defrenne (43/75, EU:C:1976:56), the Court had stated that discrimination which has its origin in legislative provisions or collective labour agreements is among the forms of discrimination which may be identified solely by reference to the criteria based on equal work and equal pay laid down by Article 119 of the EEC Treaty (which became, after amendment, Article 141 EC, now Article 157 TFEU) – in contrast to those which can only be identified by reference to more explicit implementing provisions.

Accordingly, the Court held that it was apparent from settled case-law that contrary to Tesco Stores’ submissions, the direct effect of Article 157 TFEU is not limited to situations in which the workers of different sex who are compared perform ‘equal work’, to the exclusion of ‘work of equal value’. In the light of the above factors, the Bench held that

“The interpretation that a distinction should be drawn, as regards the direct effect of Article 157 TFEU, according to whether the principle of equal pay for male and female workers is relied upon in respect of ‘equal work’ or of ‘work of equal value’ is such as to compromise the effectiveness of that article and attainment of the objective that it pursues.”

Hence, the Bench held that a situation in which the pay conditions of workers of different sex performing equal work or work of equal value can be attributed to a single source comes within the scope of Article 157 TFEU and that the work and the pay of those workers can be compared on the basis of that article, even if they perform their work in different establishments. Accordingly, the Bench reached to the conclusion that Tesco Stores 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 centers may be attributed and which could be responsible for any discrimination prohibited pursuant to Article 157 TFEU, which it was for the referring tribunal to determine.[K v. Tesco Stores Ltd., Case C‑624/19, decided on 03-06-2021]


Kamini Sharma, Editorial Assistant has reported this brief.

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