EuGH Strenghtens Equal Pay for Women and Men

The European Court of Justice (ECJ), following a referral from Watford Employment Tribunal, has strengthened equal pay for women and men with its ruling against the British supermarket chain Tesco Stores (dated June 3, 2021 - C-624/19). In a landmark decision, the judges ruled that employees can directly invoke the EU law principle of equal pay for men and women not only in the case of "equal" work, but also in the case of work of merely "equal value".

In the case underlying the ruling, several thousand female employees who mainly worked as sales assistants sued Tesco. Relying on the principle of equal pay laid down in Art. 157 TFEU (Treaty on the Functioning of the European Union), they claimed that they were entitled to the same remuneration as male sales staff. The fact that the sales employees work in sales centers and thus in different operations does not preclude this. Rather, the decisive factor was that the activities of the female sales staff were to be regarded as at least equivalent to those of the male sales staff. Tesco, however, took the view that the principle of equal pay only applied to the same work but not to work of equal value. The ECJ ultimately followed the plaintiffs' argumentation and ruled that employees can directly invoke the EU principle of equal pay even in the case of work of equal value. In doing so, the ECJ clarified that only those wage conditions that can be "traced back to one and the same source" are comparable. Such a source in the sense of a uniform responsibility is at least also possible in the case of different operations of a company. In concrete terms, this means that employees may at least invoke and compare the principle of equal pay across operations, i.e. throughout the company. Whether the activities of the female sales staff and those of the male sales staff in the case of Tesco are actually equivalent must now be clarified by the Watford Labor Court.

The ruling is also likely to attract attention in Germany. The general requirement of equal pay for work of equal value is generally recognized under German law with regard to Article 3 of the German Constitution (Grundgesetz, GG). However, while the prohibition of discrimination in pay on the grounds of gender has already been implemented in national law with the introduction of the German Equal Pay Act (Entgelttransparenzgesetz), the general requirement of equal pay is still not established in simple law. In particular, it has not yet found explicit expression in the German General Equal Treatment Act (Allgemeines Gleichbehand-lungsgesetz, AGG). The ruling has thus provided clarity to the extent that the requirement of equal pay is now also secured under EU law. Any doubts in the interpretation of Article 3 GG and the AGG may thus be eliminated. Whether the principle of equal pay applies not only throughout the company but also throughout the group remains unclear, though, even after the ECJ ruling.

Jonas Türkis