How the equal pay claim might affect SMEs

Following a highly publicised demand by thousands of female store workers, Tesco’s recent equal pay dispute could become the UK’s largest ever claim and has opened up a case for discussion of how businesses, including SMEs, can adjust their own practices to better serve employees and review working culture.

Equal pay culture

The report arose following similar action taken against Asda and Sainsbury’s, as well as in the public sector, and means the supermarket giant faces a demand of up to £4 billion in back pay for the affected store workers, costed at up to £20,000 per worker over a period of at least six years.

Equal pay has long been an issue, despite the fact that UK employers are ‘obliged to adhere to the principles of equal pay for equal work’. It’s understood that the mainly male Tesco distribution staff earn between £8.50 to more than £11 per hour, while the mainly female store staff earn around £8 an hour.

High-profile cases like these can act as a bellwether for the wider industry and so it's just as important for SMEs to ensure that their own salaries are fair and in line with official guidance.

Reviewing your practices

The UK’s wage inequality is currently at a national average of 17%, with the gender pay difference expected to close by 2045 if current trends continue. These wage inequalities can be attributed to several factors. The pay gap is not just a top-level discussion about paying women the same numerical sum as men or vice versa; it's just as crucial to look in more detail at pay arrangements and unfair dismissals.

Above all, it's key when talking about closing the gender pay gap to take into consideration not just positions with the same job title, but at different roles where the work is of comparable value. If two posts are in fact equal in value, but their pay is different, then there is a need for adjustment.

By taking proactive steps to ensure you are committed to closing the gender pay gap, your company is sure to be attractive to new employees, keep your existing talent and increase your position within the wider industry as both a business and employer.

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