NEXT Equal Pay Claim – What does this mean for employers?

Last week, in its final Judgment of the equal pay claim that has been ongoing against the retail chain, Next for the past six years, the Employment Tribunal (“ET”) ruled that it was unlawful for Next to pay its Sales Consultants, who are mostly women, less than their warehouse and distribution counterparts, who are mostly men.

Equal pay law makes clear that work that is the same, similar, equivalent or of equal value must be paid equally unless an employer can show that the difference is explained by a reason other than sex discrimination. This means that an individual cannot be paid less compared to someone who is the opposite sex to them and doing equal work for the same employer or an ‘associated’ employer. Equal pay law does not just apply to an employee’s annual salary, it also applies to other contractual terms and conditions such as pension, working hours, annual leave allowance and sick pay.

Having already decided in 2023 that the work done by women on the shop floor is of equal value to the work done by the warehouse operative workers, the ET decided that market rates was not a valid defence in equal pay claims, and it must be something more not to amount to sex discrimination.

The total amount currently estimated to be repaid by Next is in excess of £30 million. The Judgment means that not only will Next be responsible for backdating the pay of the claimants to the date that the claim was made, but it will also need to adjust its pay structure so that all the workers on the shop floor are paid equal to those in the warehouse.

The ET also ruled that store staff will also now get paid for rest breaks, nights overtime premiums and the same pay for working on Sundays in line with their warehouse counterparts.

Similar equal pay claims have already been brought against Asda, Co-op, Morrisons, Tesco and Sainsburys. Following this ruling, it is very likely that more claimants will be added to those claims and more claims will be brought against other large national retailers where there is a pay gap between men and women in the same, similar, equivalent or of equal value jobs.

It is important to note that equal pay claims are not compensatory claims, if the claim succeeds, it simply means that the claimant receives the money that they were entitled to all along.

It follows that to avoid defending expensive legal proceedings, employers with similar set ups to Next should take the time to carefully review their current pay structures across different positions and remedy any unlawful pay gaps. In particular, between store staff and warehouse workers which will be relevant to many large retailers.

For further information or to discuss a potential employment law or discrimination claim, please contact our specialist employment solicitors on 0207 3950 5234 or info@rllaw.co.uk. We are ranked as a ‘Leading Firm’ in the Legal 500 and Chambers and Partners independent guides to the UK Legal Profession.

3 September 2024