Next Workers Win Equal Pay Claims: What This Means for Employees

In a landmark decision, store workers at Next have succeeded in their claims for equal pay, comparing their roles to those of warehouse workers. Six years ago, mainly female retail consultants argued that their work was of equal value to that of predominantly male warehouse operatives. The Employment Tribunal (ET) has now ruled that the pay differences breached equal pay legislation, leading to potential compensation of up to £30 million being awarded. 

This case holds significant implications for employees, especially those in retail. Here’s what you need to know: 

Equal Pay: What Does It Mean? 

As set out in the Equality Act 2010, men and women in the same employment performing equal work must receive equal pay, unless any difference in pay can be justified. 

It is the law and employers must follow it.  If there is a difference in pay, Employers must demonstrate a valid reason for this and the reason must not involve sex discrimination. If the reason creates indirect discrimination, such as putting one gender at a disadvantage, the employer must prove that it serves a legitimate business goal and is proportionate. 

Next attempted to justify the pay differences by citing business factors such as market forces, recruitment needs, and profitability. While these reasons didn’t constitute direct discrimination, the ET found that paying retail workers less disproportionately affected women, given that the retail workforce was predominantly female. This constituted indirect discrimination, and their business factors did not amount to a sufficient legitimate aim and even if they did, it would not be proportionate, because the business need was not sufficiently great to overcome the discriminatory impact. 

Key Tribunal Findings 

The ET ruled that while some bonuses and premiums for warehouse workers were justified (like productivity bonuses linked to output), other pay differences, such as basic pay, were not. Cost savings alone, the ET emphasised, cannot justify unequal pay—especially when perpetuating historical pay discrimination between predominantly male and female roles. 

Implications for Employees 

• Justifying Pay Differences: Employers must demonstrate that any pay differences between areas of a business, where roles are predominantly carried out by one sex, are tied to legitimate business needs beyond simply cutting costs. If you are paid less than another such area doing equal work, your employer must provide clear, non-discriminatory reasons for the difference. 

• Bonus and Premium Payments: While some pay differences, such as bonuses tied to specific roles (e.g., warehouse productivity), may be justified, the ruling suggests employers will need to be transparent about why these payments are made. Employees should be aware that such incentives need to be role-specific and clearly connected to business challenges. 

What Comes Next? 

Although Next plans to appeal the decision, the ruling has set a precedent for similar claims in retail and beyond. For employees, this decision emphasises the importance of fair pay and strengthens the grounds for challenging unjustified pay gaps between roles pre-dominantly carried out by women and those predominantly men carried out by men.  

Equal pay claims may be slow, but this case demonstrates that persistence can lead to significant change.