Law firms are on the hunt for staff working in convenience stores owned by wholesalers and supermarkets who may be owed more than half a billion pounds in backdated pay.
Under equal pay legislation, women must be paid the same as men when holding roles of “equal value” in the same company. However, an analysis by Retail Express revealed that on average, wholesalers are paying the predominantly female staff in their centrally-owned shops £1.11 per hour less than their predominantly male warehouse operators.
In a similar case involving Asda, the Employment Tribunal ruled that jobs in different parts of the business – shop workers and warehouse workers - could be compared. Asda is appealing this decision and the case continues. The Employment Tribunal is yet to consider whether jobs in the different industry sectors are of equal value. If Leigh Day are successful, the law firm believes shop staff would receive five-to-six years’ worth of backdated pay, worth approximately £15,000 for each of the 15,000 staff involved in the case.
Leigh Day has also undertaken a similar case against Tesco, in which staff from One Stop and Tesco Express stores are already involved.
Based on the proposed Asda compensation model, if staff at centrally-owned Bargain Booze, Central Convenience, One Stop and Spar stores all brought successful cases against their employers, they would leave wholesalers with a combined bill of approximately £152.5m.
Successful cases by all Tesco Express and Sainsbury’s Local staff would leave supermarkets with a bill for approximately £372.8m. The cases would also force wholesalers and supermarkets to raise their convenience store wages to above what is legally required of independent shop owners.
Chris Benson, head of Leigh Day’s employment law team in charge of the supermarket cases, told Retail Express: “There are a lot of heads in the sand about this. Wholesalers with stores will know that their structure is the same as Asda’s.”
He claimed that many employers are hoping their shop staff don’t notice the warehouse pay gap so they can avoid payouts completely or delay them until after they have quietly reduced the pay gaps, therefore reducing the money owed.
Ellie Pinnells, from law firm Roscoe Reid, warned that the chance of being caught is growing, with a large increase in retail pay claims in the last year. Pinnells told Retail Express that the firm is close to beginning proceedings against Morrisons.
“The hunt is on to find more cases – claims firms are out there trying to find other large retail cases,” she said.
While the increased pay may lower comparative overheads, higher pay in other stores impacts staff retention, according to Jacqui Dales, from Spar London Road in Boston.
“I lost some good staff to supermarkets, so I’ve introduced a more tiered pay structure and introduced performance-related bonuses. This has allowed me to retain decent people,” she said.
A wholesale industry source challenged the comparisons between shop staff and warehouse workers, stating that other factors such as flexibility of hours, night shifts and strong competition for warehouse staff were likely to influence the different pay rates.
Asda, Sainsbury’s, Tesco and Morrisons all contest their staff’s backdated pay claims.
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