Tesco may be forced to make back payments of more than £2.5 billion to its staff after a defeat in the European Court of Justice (ECJ).
The Big 4 grocer is fighting a claim that argues its shop workers, who are mostly women, should not be paid around £3 an hour less than its warehouse workers, who are mostly men.
It contended that the roles could not be compared for the purposes of equal pay.
However, the ECJ disagreed, ruling that the claimants could compare their wages to those of distribution centre staff.
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“The principle, laid down by EU law, of equal pay for male and female workers can be relied upon directly, in respect both of ‘equal work’ and of ‘work of equal value,” it said.
As proceedings began before the UK officially left the EU, the ECJ retains its jurisdiction to clarify the law.
The case will now be sent back to the British courts, who will take the ruling into account.
“The jobs in our stores and distribution centres are different,” a Tesco spokesman said.
“These roles require different skills and demands which lead to variations in pay – but this has absolutely nothing to do with gender.
He added that Tesco would “strongly defend” the claims, which “will take many years to reach a conclusion”.
Asda suffered a similar defeat in March at the Supreme Court, which decided shop staff could compare their roles to those of warehouse colleagues.
The next stage of the case will establish whether the jobs are of “equal value”.
If the Big 4 grocers lose their claims, supermarkets may need to pay out a total of £8 billion to their employees.