Over 3,500 current and former employees of Next have won a significant equal pay case against the retailer, marking a victory that experts believe could highlight gender disparities in the private sector and influence future legal cases.
An employment tribunal ruled that Next failed to prove that paying its predominantly female sales consultants less than its predominantly male warehouse operatives was not discriminatory.
As a result of the tribunal’s decision, store employees who filed the claim are entitled to seek back pay compensation for up to six years, dating back to the initial claim filed in 2018. The total compensation Next is expected to pay could exceed £30 million.
The case
In addition to back pay, the ruling mandates that Next immediately equalise the basic hourly pay rates in employees’ current contracts.
The order also includes paid rest breaks and equal premiums for Sunday, night, and overtime work for store employees, aligning their terms with those of their warehouse counterparts.
This case marks the first equal pay group action in the private sector to reach a tribunal decision
Leigh Day, the law firm representing the claimants, revealed that sales consultants at Next earned between 40p and £3 less per hour compared to warehouse operatives, resulting in an average salary loss of over £6,000 for the claimants.
This landmark ruling comes as other major supermarkets, including Tesco, Asda, and Sainsbury’s, face similar equal pay claims from their retail staff. The decision could have broad implications for both current and future equal pay claims and for employers’ compensation strategies.
Court ruling
In 2018, female store staff at Next filed an equal pay claim, arguing that their work was of equal value to that performed by male warehouse workers. A preliminary hearing in May confirmed that the work of the claimants was indeed of equal value to their male counterparts.
Under equal pay law, jobs of equal value must be compensated equally unless an employer can demonstrate that the pay difference is not due to sex discrimination.
Arguments and findings
During the May hearing, Next argued that the pay disparity was due to market conditions, not gender.
However, the tribunal dismissed this justification, finding that the pay differences were driven by cost-cutting measures rather than gender bias.
The tribunal emphasized that the disparity in pay rates was not due to direct discrimination but was motivated by a desire to reduce costs and increase profits, regardless of gender distribution.
The tribunal’s findings revealed that from 2012 to 2023, 77.5% of Next’s retail consultants were women, while 52.78% of warehouse workers were men.
Industry impact
Leigh Day, representing over 112,000 retail staff across major supermarkets, hailed the decision as a significant achievement and a powerful example of the equal pay legislation’s intent.
Elizabeth George, a partner at Leigh Day, (People Management) emphasised that the ruling addresses a crucial issue in pay discrimination, noting that employers must provide stronger justifications for pay differences than simply citing market rates.
Paula Lee, also from Leigh Day, highlighted that this case sets a precedent for comparing jobs of different types when assessing equal value and calls on businesses to scrutinise their pay structures and gender distribution.
Implications for employers
Kate Palmer of Peninsula noted that the verdict could empower employees across various industries to challenge their pay. She also pointed out that equal pay requirements apply to all employers, regardless of size.
While Next has indicated its intention to appeal, the case underscores the need for employers to review their salary benchmarking processes.
A spokesperson for Next commented that while the tribunal rejected most claims, including those related to direct discrimination and bonus pay, they plan to appeal the decision.
This case marks the first equal pay group action in the private sector to reach a tribunal decision, raising important legal questions.
