Does Union Consultation Protect Employers from Discrimination Claims?

The Facts

In February, following consultation and agreement with trade union Usdaw, Tesco announced cuts in pay rates for hourly paid staff who worked weekend and night shifts. The reason for the reduction in pay was to fund a 3.1% pay rise to £7.62 per hour for workers across the retailer's workforce. However, workers who were previously receiving double time for working at the weekend or in the evening have since seen their pay for these hours reduced by up to 25%.

Lawyers representing the workers allege that the majority of staff affected by the changes are over 40 years old and it is reported that all staff employed by the retailer prior to 5 July 1999 have seen a reduction in their earnings. Tesco has said, however, that it has provided a lump sum transition payment to compensate those who were negatively impacted, which was equivalent to the loss in pay over the next 18 months.

Tesco also points out that it did consult and agree the proposed changes to workers' contracts with both unions and staff representatives.

Best Practice

On the basis of the information available, it does appear that Tesco went through a recognisable consultation process and reached agreement with unions before implementing the changes. However, this will not necessarily protect them from an age discrimination claim.

Tesco will have to show that any disproportionate impact on the over 40s can be justified, ie. that changing the hourly pay structure was a proportionate means of achieving a legitimate aim.

We will keep you updated as the case progresses.

For more information please contact Michael Halsey in our Employment Law team on 020 7665 0842.