Article 157 TFEU has direct effect in equal pay claims for work of equal value (K and others v Tesco Stores Ltd)

Article 157 of the Treaty on the Functioning of the European Union (TFEU) must be interpreted as having direct effect in proceedings between individuals claiming a failure to observe the principle of equal pay for male and female workers for ‘work of equal value’. Furthermore, Article 157 TFEU includes within its scope situations where the pay conditions of workers of different sex performing equal work or work of equal value can be attributed to a single source, with the effect that the pay of those workers can be compared on the basis of that article, even if the workers perform their work in different establishments, according to the Court of Justice of the European Union (CJEU).

K and others v Tesco Stores Ltd Case C-624/19

What are the practical implications of this case?

This decision, which is significant both in terms of its clarification of the law and its impact in relation to this group equal pay litigation, will make it easier for the claimants to pursue their claims because it allows them to:

• rely on the direct horizontal effect of Article 157 TFEU in relation to their equal pay claims for work of ‘equal value’
• rely on the direct horizontal effect of Article 157 TFEU where the pay conditions of workers of different sex performing equal work or work of equal value can be attributed to a single source even where the workers perform their work at different establishments

This is of benefit to the claimants because Article 157 TFEU is broader than the more detailed provisions of the Equality Act 2010 in relation to who can be relied upon as comparators where work is performed at different establishments. However, the CJEU’s decision on these preliminary points does not mean that the claimants’ claims for equal pay will necessarily succeed because:

• the claimants must still show at the final trial in the employment tribunal that they performed work of equal value, and
• the respondent will still be able to rely on any defence open to it, including (if appropriate) the statutory defence that the difference in pay was due to a genuine material factor which was not itself discriminatory on the grounds of sex

It is worth noting that the CJEU was able to give judgment in this matter even though the UK left the EU on 31 December 2020 because, under the terms of the Withdrawal Agreement, the CJEU continued to have jurisdiction to determine any references for a preliminary ruling made from the UK courts or tribunals prior to that date. The extent to which it will be followed by UK courts and tribunals is, however, slightly less clear. This is because, under section 6 of the European Union (Withdrawal) Act 2018, UK courts and tribunals are:

• not bound by decisions of the CJEU made after 31 December 2020, but
• allowed to have regard to such decisions, so far as they are relevant to any matter they are considering, but not to such an extent the court would consider itself bound

Given that this was a UK reference, it seems most likely that tribunals and courts will follow it in relation to how Article 157 TFEU is to be applied, at least until any contrary view is expressed by domestic courts at a high appellate level.

Case details

• Court: Court of Justice of the European Union (Second Chamber)
• Judges: A Arabadjiev (President of the Chamber), A Kumin, T von Danwitz (Rapporteur), P G Xuereb and I Ziemele
• Date: 03 June 2021

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