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Sensemaker: Tesco’s awkward pay gap

Tuesday 26 January 2021

Sensemaker: Tesco’s awkward pay gap

What just happened

Long stories short

  • Chinese military aircraft flew more than two dozen combat aircraft into Taiwanese airspace over the weekend (more below). 
  • Russians demonstrated in more than 100 cities on Saturday to demand the release of Alexei Navalny.
  • Robert Halfon, the Conservative minister, warned of “an epidemic of mental health problems and educational poverty” if the UK government does not reopen schools.

Tesco’s awkward pay gap

You might have thought Britain’s supermarkets had enough on their plates with Brexit and Covid. Not so. Tesco, the UK’s biggest retailer, is fighting an equal pay claim that could land it with a £2.4 billion bill. Tesco shop workers, who are mostly women, say they are being paid £3 an hour less than their warehouse colleagues, who are mostly men, for doing the same job. 

For example: Christine Sepahi worked for Tesco stacking shelves, unloading deliveries, running checkouts, training staff and managing shops for 26 years until 2016. She remembers lifting 25kg bags of potatoes and 45kg blocks of cheese and says she would regularly be at work from 4am to 9pm, despite only being paid for a 36 hour week. 

She visited the warehouses when she was a manager and was struck by the inequality. At the depots, workers unload lorries and split the goods into cages that go out to shops. At the shops, workers unload lorries to put the contents of those cages onto shelves while also dealing with customers. “These people have not been paid fairly since I started out in 1990. And it’s just not right,” she says.

For the record: Men and women are entitled to equal pay for equal work under the Equality Act 2010. Tesco considers warehouse work more taxing, but the claimants disagree.

Where the two sides stand:

  • For the overall claim to be successful, the lawyers representing Sepahi and around 7000 other claimants have to show that the work done by warehouse workers and shop workers is of “equal value”, and that the reason they receive different salaries is instead due to their gender. 
  • On 14 January, Tesco lost an appeal against an employment tribunal order that it must reveal just how it pays its employees and what it pays them for. After winning this battle, the Tesco workers will now be granted access to the detailed job description and pay information needed to make this comparison.
  • Emily Fernando, a lawyer at Harcus Sinclair, one of the law firms representing the shop workers, said that up to this point there had been a “significant asymmetry of information,” which is why it had been important to “fight tooth and nail” for the disclosure. “It means that we can see where our best cases are and we can see where the greatest pay disparity is,” she said. 
  • A Tesco spokesperson said: “There are differences between jobs in our stores and distribution centres, in terms of skills and demands which lead to variations in pay – but this has absolutely nothing to do with gender. We reward our colleagues fairly for the jobs they do and work hard to ensure that the pay and benefits we offer are fair, competitive and sustainable. These claims are extremely complex and will take many years to reach a conclusion. We continue to strongly defend these claims.”

This case is remarkable because of the scale of Tesco’s workforce. If the workers win, the list of potentially eligible employees would include anyone who either currently works or has previously worked in a Tesco store in England, Scotland or Wales for hourly pay during the past five to six years (depending on whether they’re based in Scotland or the rest of the UK). If Tesco loses the overall case, it may have to pay out an average of £10,000 to 239,000 workers just for historic inequality.

It’s rare but not unheard of for large claims on equal pay to succeed. In 2012, Birmingham council was forced to budget for £757m in payouts to cooks, cleaners, care staff and other workers with traditionally female roles. But employment tribunals are usually brought by lone individuals against a company. 

Tesco has plenty of experience dealing with them. The Tortoise Responsibility100 Index, which ranks the FTSE 100 on their efforts to do better for people and the planet, found that Tesco has faced 312 employment tribunal claims since 2017, the highest number of any company in the index. Of the 312, 20 were upheld. 

Tesco isn’t the only retailer on the hook for equal pay. Workers at Morrisons, Asda, Sainsbury’s, Next and the Co-op have also put forward large equal pay claims. 

Taken together, workers for the four largest UK supermarkets could be entitled to £10bn in back pay, according to the law firm Leigh Day, another firm representing the workers. Don’t expect these cases to be over quickly, though. Asda had a hearing before the Supreme Court last year in a similar dispute on pay differentials between shop and warehouse roles. The case is in its 13th year.

Wealth investment, fairness, prosperity

Boo who?
Boohoo will buy what remains of Debenhams but won’t keep any of its stores open or any of its shop floor staff in work. ASOS are in exclusive talks with Arcadia’s administrators with a view to “acquire strong brands that resonate well with its customer base”. More evidence if it were needed that a) the pandemic has accelerated trends already under way and b) the UK high street that emerges from Covid will be very different from that of March 2020. As a place to go to buy fashion and make-up, it’s being eviscerated. Boohoo, founded as an online-only fashion retailer in 2006, will pay £55 million for Debenhams’ “intellectual property”, the FT confirmed this morning. That means its brand (skewing older than Boohoo’s own), its databases and its presence in the sport, beauty and homeware sectors. All 118 remaining Debenhams stores are expected to stay closed for good; ditto all 400 shops once operated by Sir Philip Green’s Arcadia. So what are high streets going to be for? Drinking coffee and showcasing clothes we’ve bought online, presumably. We are all our own shop windows now.

New things technology, science, engineering

Warning warning
Most people will be familiar with the warning notes that Twitter tags on posts that contain misinformation. When tweets plugging conspiracy theories linking Covid-19 to 5G are posted, for example, Twitter adds a note in blue saying “Get the facts about Covid-19”. But a study published last week suggests that these warning notes could be counterproductive. It found that tweets with content warnings receive about 70 per cent more engagement (measured in retweets and likes) than those without. Facebook and Instagram also rely on these kinds of labels to tackle the spread of misinformation, but to conclude that they’ve failed would be too simple. The study also found that the most popular interactions with such tweets tend to be those further debunking the false claims or mocking the author of the post for getting the facts wrong. The fight against misinformation is going to be like this: long, hard and complicated.

Our planet environment, natural resources, geopolitics

Carbon pricing latest
John Kerry makes his first public appearance as US climate envoy today at a Climate Adaptation Summit hosted by the Netherlands. It’s aimed at boosting climate change resilience in vulnerable countries like Bangladesh and Malawi, but the headline may be the simple fact of US participation after four years of active American obstruction. It’s hard to see where this participation is going to have the greatest effect, but keep an eye on carbon pricing. Janet Yellen, Biden’s nominee for treasury secretary, told the Senate Finance Committee last week – accurately – that “we cannot solve the climate crisis without effective carbon pricing”, and she said her boss agreed. Does this mean carbon trading or a carbon tax? Neither has much backing in Congress, so Axios wonders if the new administration may try an Obama-style clean power plan by which states  buy carbon credits to offset coal and gas-fired power plant emissions. Either way, the global average price of carbon has to rise from about $30 to at least $80 per tonne of CO2 equivalent to keep the goal of 1.5 degrees of warming within view.

The 100-year life health, education, living, public poliCY

Vaccinate everyone
Rich countries could forego 3.5 per cent of GDP growth if they prioritise their own Covid vaccination programmes ahead of those of poorer countries, according to a study published by the WHO today. This is partly a data-based restatement of the WHO’s mantra that no one’s safe until everyone is safe, but it’s also an urgent warning about Covid variants specifically: the longer the developed world delays in helping the developing world roll out vaccines, the greater the risk that new variants will spread out of control – and beyond the ability of those vaccines to provide protection. The study posits a $4.4 trillion hit to global output in a scenario in which poor countries get the vaccine late or not at all. Will an appeal to enlightened self-interest work where appeals to do the right thing haven’t? Here’s hoping.

Belonging identity, society, beliefs, countries

West Pacific showdown
Of all the foreign policy flashpoints blinking on Tony Blinken’s radar, none is more worrying than the Taiwan Strait. China threw down a gauntlet for the incoming US Secretary of State by sending dozens of warplanes into Taiwanese airspace – which it regards as its own – at the weekend. Blinken (and Biden) have to react in a way that reassures Taiwan and tells China to back off, without starting World War Three. One early gambit has been to put lumbering 60-year-old B52 bombers back in the air in a Chinese “air defence identification zone” that the US refuses to acknowledge – and to put lumbering 60-something war correspondents inside them. The WSJ’s grizzled Michael Gordon had a ride in one over the weekend. His dispatch, datelined “Over the East China Sea”, is half geopolitics, half paean to the oldest weapon in the Pentagon’s inventory. In reply, China has a new submarine-launched missile that the South China Morning Post says could put the People’s Liberation Army within striking distance of the US mainland. Can’t we all just get along?

the week ahead

UK
25/1 – ONS release on Covid-related deaths by occupation; NHS Test and Trace head Dido Harding addresses CBI webinar, 26/1 – ONS release on unemployment figures; NHS England head Simon Stevens appears before select committee session on the pandemic; MPs publish report on Covid-19 in developing countries, 27/1 – Northern Ireland secretary Brandon Lewis appears before Northern Ireland affairs select committee, 28/1 – NHS Digital annual release on drug misuse in England; UAE foreign minister Anwar Mohammed Gargash outlines foreign policy priorities at Chatham House, 29/1 – Bar Standards Board publishes annual report on diversity at the Bar, 30/1 – BA cargo staff strike over “fire and rehire” proposals, 31/1 – one year since first UK Covid cases announced

World
25/1 – Davos begins online; Oxfam releases annual global inequality report; World Health Organisation releases report on economic need to vaccinate developing countries; US House speaker Nancy Pelosi set to deliver impeachment article to the Senate, 26/1 – India celebrates Republic Day; European Medicines Agency director Emer Cooke appears before European Parliament to discuss Covid-19 vaccine, 27/1 – International Holocaust Remembrance Day; Apple, Facebook and Tesla report quarterly results; Bulletin of the Atomic Scientists announce latest time on “Doomsday Clock”; US president Joe Biden set to announce climate actions, 28/1 – US reports fourth quarter GDP and job claims, 29/1 – March for Life takes place in Washington DC, 31/1 – Iran Ten-Day Dawn celebrating return of Ayatollah Khomeini begins

Thanks for reading, and do share this around.

Ellen Halliday
@ellen_halliday

Kim Darrah
@Kimgidarrah

Giles Whittell
@GWhittell

Xavier Greenwood
@XAMGreenwood

Photographs by Getty Images

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