Ross Clark

The Tesco equal pay claim sets a dangerous precedent

The Tesco equal pay claim sets a dangerous precedent
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I have decided that my work is of equal value to that of Claudia Schiffer and that therefore in future I should be paid the same as her. Why not? Okay, we don’t quite do the same thing, but we both get up in the morning, go out and do what we do as best we can. Yet she is paid more than I am, which is indefensible.

That is pretty much the basis of the claim by 100 female Tesco shop floor workers who have launched an action against the supermarket claiming that they should be paid the same as men who work in the store’s warehouses. It is discrimination, they say, because their work is of ‘equal value’. It is estimated that, if successful, Tesco could face claims for up to six years’ of back pay for 200,000 workers – amounting to as much as £4bn.

The claimants do have one precedent on their side – Birmingham City Council was similarly stung by claims from female employees who said they were underpaid relative to male-dominated jobs. The cases ended up costing Birmingham’s taxpayers over £1bn – £1,000 for every man, woman and child who lives in the city. Remember that figure next time you hear Labour or anyone on the Left bleating about ‘austerity’ – that is the sort of sum that equal pay claims are taking out of public services.

The concept of ‘work of equal value’ has become a racket which needs to be removed urgently from equal pay legislation before it bankrupts good companies and places an even higher burden on taxpayers. The idea that people working in different jobs should be paid the same on the arbitrary judgement of an employment tribunal utterly undermines labour markets. Employers have to adjust their pay according to the difficulty of recruiting and retaining staff. If a supermarket is short of warehouse staff it needs to up their salaries. If, at the same time, it has an excess of people wanting to be cashiers then it can hold down their earnings. That is how the labour market works, to help ensure that job-hunters are directed to the occupations where workers are needed most.

The concept of equal pay throws a huge spanner in the works of that market. And to what purpose? If Tesco’s checkout women fancy earning extra money there is absolutely nothing to stop them applying for jobs in the company’s warehouses. The assertion that they are being discriminated against on the basis of their gender is ridiculous.

A claim for £4bn would be four times Tesco’s profits for last year. These equal pay claims really could have the ability to bankrupt businesses and destroy many thousands of jobs, those of men and women alike. Question is, will the government have the guts to reform equality legislation before it is too late?