Equal pay litigation: key risks and lessons for employers

Recent Court of Appeal commentary in Tesco Stores Ltd v Element (2026) provides a timely reminder that equal pay litigation remains a significant and evolving risk for UK employers.

While the decision focuses on how tribunals identify whether “work” of the Claimants is of equal value to the work of their chosen comparator(s) its wider significance lies in the broader direction of travel. Equal pay claims have been increasing in both scale and complexity, and the latest decision in the Tesco case reflects a trend towards more pragmatic case management.

Equal pay litigation: a systemic risk for employers

Equal pay claims rarely arise in isolation. In many sectors, particularly retail, local government and large service organisations, they are brought as multi-claimant actions involving hundreds or thousands of employees.

This reflects a core feature of equal pay litigation: risk typically arises from systemic issues, including:

• gender-segregated roles (for example, frontline versus operational functions);
• historic pay practices and legacy grading structures;
• inconsistent or outdated job evaluation processes.

The legal framework

Equal pay claims are contractual in nature. The Equality Act 2010 implies a sex equality clause into contracts, modifying less favourable terms to match those of a valid comparator.

A claimant must show they are doing equal work, which may be:

• like work;
• work rated as equivalent under a job evaluation scheme; or
• work of equal value (the most common route in large claims).

The equal value route allows comparisons between often very different roles, such as customer-facing staff working on the shop floor and distribution roles working in warehouses.  Ultimately, the Claimant is seeking to show that their work should be considered to be of equal value (and therefore paid the same) in terms of a number of factors, including effort, skill and decision-making. 

Once equal work is established, the burden shifts to the employer to show any pay difference is due to a material factor unrelated to sex.  Even where such a factor exists, it still needs to be objectively justified if it has a disproportionate impact on one sex.

Equal value claims

In equal value claims, where it is not accepted by the employer that the Claimant and their chosen comparator are in roles of equal value, the Employment Tribunal appoints an independent expert to carry out an assessment of the two roles and prepare a report for the Employment Tribunal to then determine if the roles are of equal value.  To allow the independent expert to provide their report, the parties provide evidence of the work carried out in equal value job descriptions (EVJDs).  The parties then have to identify facts about the roles that are agreed and those which are in dispute.

In Tesco Stores Ltd v Element, detailed job descriptions were prepared of the Claimant and the comparators on both sides and there were thousands of disputed facts between the parties.  The Court of Appeal determined that this approach was not helpful at all and was inconsistent with the interests of justice.  When trying to understand and make findings of facts about what work the Claimant and their comparators did, the Court of Appeal agreed that Tesco's highly detailed and prescriptive training documents were the best evidence of what the relevant jobs entailed. It therefore ordered the parties to produce new EVJDs and RoDs focusing on the training documents.

What to watch out for when assessing the potential risk of equal value claims

• Comparators could be found in any part of the business where there is a single source determining their pay: Comparators are not limited to the same team or location as the Claimant. Comparisons can be drawn across different sites and business units where there are common terms or a single source of pay-setting. This allows claims to bridge operationally distinct parts of the business, significantly widening potential exposure.

• Documentation is critical: This case demonstrates that Tribunals will now have to place much more weight on contemporaneous documentation, including job descriptions, training materials and records of pay decisions rather than job descriptions prepared by the parties once proceedings have been issued.  The risk here is if contemporaneous documents of this nature are unclear or inconsistent it could potentially lead to elongated disputes between the parties.

• Historic decisions remain live: Equal pay claims allow up to six years’ back pay (plus interest), and civil claims may extend liability further where tribunal time limits have expired because they are essentially breach of contract claims. Historic pay structures and legacy decisions therefore continue to present risk today.  Employers should take a holistic view of pay frameworks rather than focusing on isolated claims.

• Consider now material factor defences: Factors such as market forces or genuine operational differences can be used as defences to all equal pay claims but as with any defence, there needs to be a clear paper trail to support the defence that is put forward.  Unsupported or outdated rationales are unlikely to succeed.

• Understand potential exposure early: Claims can generate significant back pay liability and trigger wider cohort claims. Exposure should be assessed on a group basis, with early financial modelling informing risk rating.

How we can help

We support employers in managing equal pay risk both proactively and in the context of live claims.

This includes:

• carrying out equal pay audits;
• reviewing job evaluation schemes and pay structures;
• defending equal pay claims;
• advising on material factor defences and litigation strategy; and
• improving documentation and governance.

Early, strategic input can significantly reduce both legal exposure and operational disruption.  Please do contact your usual Foot Anstey contact to discuss further if you have any concerns.