Next Workers Secure Equal Pay Victory Against Retail Chain

More than 3,500 current and former employees of Next have won the final stage of a six-year legal battle over equal pay, marking a significant victory for gender pay equality in the private sector.

Tribunal ruling on pay disparities

An employment tribunal ruled that store staff, who are predominantly women, should not have been paid less than warehouse employees, where just over half of the workforce is male.

Next argued that the pay difference between sales consultants and warehouse operators was due to the 'market rate for each role, which needed to be followed to maintain business viability.

While the tribunal acknowledged that this pay gap was a result of Next's efforts to cut costs and boost profits, it ruled that 'a more compelling business reason' is typically required to justify such pay disparities.

The tribunal rejected Next’s justification that higher pay rates for warehouse workers were in line with broader job market rates.

Next has announced plans to appeal the decision.

A 'significant' financial impact

Lawyers representing Next shop staff described the ruling as 'hugely significant', with potential back pay totalling over ￡30 million.

The ruling has also inspired other retail workers to pursue legal action.

More claims are expected as solicitor Leigh Day announced it is representing over 112,000 employees from Asda, Tesco, Sainsbury's, Morrisons and Co-op who are pursuing equal pay claims.

Gender and job roles at Next

Between 2012 and 2023, 77.5% of Next's retail consultants were women, compared to 52.75% of warehouse operators who were men.

The tribunal noted that the pay difference was not a result of direct discrimination, but rather efforts to "reduce costs and enhance profits."

The ruling highlighted however that the "business need was not sufficiently great as to overcome the discriminatory effect of lower basic pay."

Worker response to the ruling

Helen Scarsbrook, a 68-year-old lead claimant who worked for Next for over 20 years, expressed relief and pride in the victory.

“We did it!” she exclaimed.

“It has been a long six years battling for the equal pay we all felt we rightly deserved, but today we can say we won.”

Scarsbrook highlighted the physical demands of retail work, stating that female workers also had heavy loads to life, just as the men do in the warehouse.

“We lift the same boxes they lift,” she added.

She also emphasised that despite the enjoyable aspects of her job, the role is often undervalued in terms of pay.

Ongoing legal and financial adjustments

Legal firm Leigh Day stated that claimants' contracts would now be adjusted to ensure fairer pay rates.

Additional adjustments, such as more equitable night payments, paid rest breaks and Sunday pay may also be extended to shop staff.

Next’s response

Next emphasised that this is the first equal pay group action in the private sector to reach a tribunal decision.

The company pointed out that no cases of direct discrimination against female staff were upheld, and the tribunal found no conscious or subconscious gender bias in setting pay rates.

The process of calculating back pay for the claimants is expected to begin soon.

It remains unclear whether other staff not directly involved in the case will see their employment terms improved automatically.

The ruling represents a pivotal moment in the fight for equal pay, and could set a precedent for future cases across various industries.

Key takeaways for UK employers from the judgement

This case is a crucial reminder for UK employers of the importance of regularly reviewing pay structures and employment practices to ensure compliance with equal pay legislation.

Here are key takeaways from this case that businesses should consider:

• Regular Pay Structure Reviews: The tribunal ruling against Next underscores the importance of conducting regular reviews of your pay structures. Employers must ensure that roles, even those that might seem distinct, are evaluated for their equivalence in terms of skills, effort, and responsibilities. This helps in ensuring compliance with equal pay legislation and avoiding unintended pay disparities that could lead to legal challenges.
• Objective Justifications for Pay Disparities: The Next case demonstrated that citing market rates alone is insufficient to justify pay differences. Employers must ensure that any disparities in pay are based on objective, measurable criteria that can stand up to scrutiny. This could involve documented assessments of job demands, responsibilities, and working conditions.
• Proactive Pay Audits: Conducting regular pay audits is a proactive step that can help identify and rectify any pay inequalities within your organisation before they escalate into legal issues. These audits should comprehensively cover different roles, genders, and other demographics to ensure fairness and compliance with equal pay legislation.
• Transparent Pay Policies: Establishing and maintaining transparent pay policies is crucial. Employees should have a clear understanding of how their pay is determined and trust that these decisions are based on fair and non-discriminatory practices. Transparency in pay policies can significantly reduce the risk of discrimination claims and foster trust within the workforce.
• Preparation for Increased Scrutiny: Given the high-profile nature of the Next case, other employees across various industries may be encouraged to bring similar claims. Employers should be prepared for this potential increase in scrutiny by ensuring their pay practices are robust, fair, and well-documented.
• Cultural Shift Towards Equality: Beyond legal compliance, fostering a culture of equality within the workplace is essential. This involves encouraging open discussions about pay and equality and ensuring that all employees feel valued. Promoting such a culture can help prevent discrimination and enhance overall employee satisfaction and morale.