Equal pay rule can be invoked in court between individuals or private entities for alleged gender pay differences in ‘work of equal value’

This ECJ decision in case Tesco Stores (C-624/19) is accessible here. 

 Tesco Stores is a retailer active in the UK with approximately 250,000 employees in total and around 11,000 employees for its distribution activities. All are paid on an hourly basis, working in different types of jobs. A group of 6,000 current and former employees, both men and women, brought a claim against Tesco before the Labour Tribunal of Watford alleging that they had not received equal pay for equal work, in breach of national and European rules. Female workers considered that their work and that of the male workers employed by Tesco Stores in the distribution centres of its network, although performed in different establishments, should be subject to common working conditions, based on Article 157 TFEU. 

Article 157 reads as follows: 

1. 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.
   
   
2. For the purpose of this Article, “pay” means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment, from his employer.
   
   Equal pay without discrimination based on sex means: (…) (b) that pay for work at time rates shall be the same for the same job (…)”

The defendant sustained that this article has no direct horizontal effect in the context of claims based on ‘work of equal value’ and could hence not be invoked in court directly between individuals in that context.  The British labour tribunal referred the matter to the ECJ for a preliminary ruling precisely on this issue. 

In the judgment, the ECJ first recalled its judgment in Praxair MRC (C-486/18), in which the prohibition of discrimination between male and female workers also applies to collective and individual agreements aiming at regulating pay, as well as its other settled case law allowing courts to appreciate other gender pay based differences in treatment based on the litigious rule. According to the ECJ, the direct effect of this article is thus not limited to situations where workers of different sex who are compared perform ‘equal work’, to the exclusion of ‘work of equal value’, as wrongly purported by the defendant.

The ECJ then concluded that the abovementioned Article 157 TFEU must be interpreted as having direct horizontal 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’, as referred to in that article, is argued.

The potential impact of this ruling cannot be underestimated. It corroborates the EU Commission’s and member states’ efforts to mitigate and eliminate the gender pay gap. However, since the ruling passes the responsibility of assessing ‘work of equal value’ to national courts, we anticipate that this may give rise to numerous court cases throughout the European Union.