Next Plc has lost a significant equal pay claim, with an employment tribunal ruling that the retailer underpaid its predominantly female sales staff compared to its mainly male warehouse workers. The decision affects 3,540 current and former claimants and could result in Next paying more than £30 million in compensation.
The tribunal found that between 2012 and 2023, 77.5% of Next's retail consultants were female, while 52.75% of warehouse operators were male. Although the tribunal stated the pay difference was not due to direct discrimination or conscious gender bias, it concluded that Next's argument of differing "market rates" and the need for 24/7 warehouse staffing was not a sufficient justification to overcome the discriminatory effect of lower basic pay for retail staff. The tribunal emphasized that the "business need was not sufficiently great as to overcome the discriminatory effect of lower basic pay."
The ruling is expected to have broad implications for other major UK retailers facing similar equal pay claims, particularly supermarkets with over 100,000 workers involved in such cases. Claimants, including Helen Scarsbrook, a lead claimant who has worked for Next for over 20 years, are now eligible for back pay compensation dating back up to six years from when their claims were filed. Their basic hourly pay terms will also be automatically equalized.
Next had argued that the pay differences were based on the market rate for each position and the operational demands of warehouse roles, which include night shifts, Sundays, and public holidays. However, lawyers representing the staff, Leigh Day, highlighted that the tribunal made it clear that relying solely on market rates is not a valid defense in such equal pay claims, and that the financial compensation is not a windfall but pay the employees were always entitled to. Next has indicated its intention to appeal the judgment.
