Tesco’s investors don’t appear to be overly concerned about the impact of an upcoming equal pay claim.
Lawyers think the lawsuit could be worth £4 billion, but stock prices continue to climb.
What’s The Legal Claim?
Investors don’t seem to be too worried about the impact of an equal pay legal claim, despite the large predicted size of the suit. Even though the wider market saw relative underperformance from the shares, they have been experiencing a strong recovery.
Two of the company’s top rivals, Sainsbury’s and Morrisons both also experienced underperforming stocks, which helps to illustrate that the underperformance is not exclusive to Tesco. In fact, the latter company’s stock rose and closed higher on the day that the news of the equal pay suit was released.
Why is it Happening?
The possible claim against Tesco is not unlike two other claims that are working their way through the legal systems. In those cases, the target is Sainsbury’s and Asda. The issue at the heart of these claims is that store workers, the majority of whom are female, are not being paid as much as warehouse workers and distribution centre workers, the majority of whom are male. This, despite the fact that their jobs are described as being of essentially equal value to their companies.
At the time this article was written, the Tesco claim had not yet been officially filed, though it was expected imminently. That said, without the official filing of the suit, the company had yet to make any public comment. That said, once the filing takes place, it is unlikely that it will remain limited to its initial size.
There are many more workers who could be affected and who may make their own claims. This could be the case both at Tesco and among its rivals. The proceedings and outcome of this case could turn it into something exceptionally larger.
Back Pay For Up to 200,000 Workers
The law firm at the heart of this upcoming case, Leigh Day, estimates that as many as 200,000 Tesco workers may be owed back pay of £20,000 each. It is that calculation that produces the £4 billion total for the case value.