Key takeaways
Retailers could face big equal pay bills
Thousands of staff are claiming unfair pay, which could cost millions.
Women in stores want pay like warehouse staff
Claims focus on differences in pay between shop floor and warehouse roles.
Check your pay policies to avoid trouble
Retailers should review how they pay staff to prevent future claims.
Large-scale equal pay claims may cost UK retailers millions of pounds
UK retailers are currently struggling with rising overheads, including the recent increases in the national minimum wage and employers’ national insurance contributions. This struggle to maintain profitability is further compounded by the long-running group equal pay disputes being fought by many of the UK’s biggest retailers.
These massive equal pay claims are all framed in a similar way – mainly female store workers argue that they perform work of ‘equal value’ to their mainly male colleagues working in distribution centres or warehouses, and therefore that they should be paid equally to them.
The potential value of these group equal pay claims cannot be underestimated – they reportedly involve hundreds of thousands of claimants and, if their claims are successful, the compensation bills will potentially run into hundreds of millions of pounds. For example, in 2022, a council reportedly agreed to pay out £770 million to settle its long-running equal pay dispute with approximately 19,000 claimants.
The sheer scale of this litigation is also difficult to envisage. Due to their size and complexity, each group claim requires several tribunal hearings, the appointment of equal pay experts and massive legal teams. By way of example, the EAT recently said that a single preliminary fact-finding hearing in one house-name retailer claim reportedly had a 22,000+ page bundle and took 109 days of hearing, deliberation and site visits to conclude. This decision was this week largely upheld on appeal by the EAT, although it found minor errors in some areas of the tribunal’s fact-finding.
Which usefully highlights another common feature of these claims – they generally involve numerous appeals on preliminary legal and factual points. It is clear from recent decisions that the judges are becoming increasingly frustrated with the number of appeals, with the EAT recently saying some grounds of appeal were ‘nitpicking’.
With the cost and risk associated with equal pay claims, and the EU Pay Transparency Directive on the horizon for companies operating within the EU, it is essential retailers review their pay structures and job roles. Taking proactive steps today can help avoid costly litigation later, so do get in touch with us if you require support minimising the risks.
