Background
This case concerns Tesco’s appeal against an Employment Tribunal (ET) decision that refused permission for the supermarket to submit expert economic evidence in a long-running equal pay dispute. The claimants, represented by Leigh Day and Harcus Parker, are current and former Tesco employees arguing that their work in Tesco stores is of equal value to that of distribution centre workers, who are paid more.
With over 50,000 claimants, some cases dating back to 2018, the litigation has been subject to delays. The ET originally planned to determine the "equal value" stage before considering Tesco’s material factor defence (MFD), which argues that pay differences are due to legitimate business reasons rather than sex discrimination. However, due to prolonged delays, the tribunal decided to hear the material factor defence first.
Tesco applied to introduce expert evidence from economists to support its claim that market forces influenced pay rates, but the ET rejected this request, leading to the appeal.
Key Issues
1. Whether Expert Evidence Was Necessary
- Tesco sought to introduce economic experts to testify on:
- Labour market conditions for store and distribution centre workers.
- The impact of increasing store workers' pay on Tesco’s business and the wider retail market.
- The ET refused the application, reasoning that:
- Market factors and public interest concerns (e.g., retail price increases) were not relevant to Tesco’s justification for pay differences.
- Tesco’s senior staff could provide sufficient factual evidence on these points without expert input.
2. Legal Standard for Admitting Expert Evidence
- The Equal Value Rules state that expert evidence should be restricted to what is reasonably required to resolve the case.
- Tesco argued that economic analysis was crucial to proving its material factor defence, particularly regarding competition and retention.
- The ET’s ruling suggested it had misinterpreted the legal test by focusing on whether Tesco’s arguments were legally valid rather than whether expert evidence could assist the tribunal in assessing them.
3. Misunderstanding of Tesco’s Case
- The EAT found that the ET had misunderstood the "Consequences Issue", believing Tesco’s argument was about the future impact of an equal pay ruling, rather than the historical justification for existing pay differences.
- This error led the ET to wrongly dismiss the relevance of economic evidence.
4. Failure to Conduct Proper Balancing Exercise
- The ET did not fully consider the balance between:
- The helpfulness of expert evidence in resolving the case.
- The costs and delays associated with allowing expert testimony.
- The EAT found that this balancing test was not properly applied.
Employment Appeal Tribunal (EAT) Decision
1. ET’s Decision Was Unsafe
- The ET misapplied the legal test by focusing on the validity of Tesco’s defence rather than whether expert evidence was necessary to assess the issues.
- The ET misunderstood Tesco’s case, leading to an incorrect rejection of expert evidence.
2. Case Remitted for Reconsideration
- The EAT overturned the ET’s ruling and remitted the case back to the same tribunal for a fresh decision on whether Tesco can introduce expert evidence.
- The same judge will handle the reconsideration, as the EAT found no reason to assign the case to a different tribunal.
Significance
This case underscores the importance of expert evidence in complex equal pay claims where market factors are used as a defence. Trade unions and claimants should be aware that employers may argue that external economic conditions justify pay disparities, and tribunals must carefully consider whether expert testimony is needed to assess such claims. The ruling also highlights the need for careful case management in large-scale equal pay litigation to prevent unnecessary delays.
Outcome
Tesco’s appeal was upheld. The ET must reconsider whether expert evidence is necessary to resolve the material factor defence, ensuring a fair process in this significant equal pay dispute.
