Next loses equal pay case

More than 3,500 current and former store staff of fashion retailer Next have won their six-year legal fight for equal pay – the first in a number of equal pay cases in retail to reach the final stages.

The Employment Tribunal ruled that Next failed to show that paying their sales consultants in store, who are overwhelmingly women, lower hourly pay rates than their warehouse operatives, was not sex discrimination. Sales consultants receive lower basic hourly pay than warehouse operatives (a difference ranging from £0.40 to £3). The claimants’ average salary loss is more than £6,000 each.

The store staff who brought the claim will now be entitled to compensation by way of back pay going back up to six years from when they put in their claims and including the time that has elapsed since they put in their claims. The first claims were submitted in 2018. In addition, their basic hourly pay terms will automatically be equalised in their existing contracts. The win also extends to providing the store staff with paid rest breaks, and equal Sunday, Night and Overtime Premiums in line with comparable terms in the warehouse contracts.

Compensation (back pay) for the claimants will now be assessed by the Tribunal. Only those who have brought claims will be entitled to compensation for lost pay and will be guaranteed to have their contracts automatically equalised, but Leigh Day, the law firm that represented them which claims Next could face a bill in excess of £30 million as a result, is continuing to submit claims for sales consultants who were not in the original 3,500 and the number of claims is expected to increase significantly over the coming weeks and months following the successful ruling.

The significance of the result extends beyond Next with Leigh Day representing more than 112,000 store staff across the five major supermarkets, Asda, Tesco, Sainsbury’s, Morrisons and Co-op all bringing similar equal pay claims. Each case will be decided on its own particular facts, says the firm.

In 2023 the work done by the women in the Next stores was ruled to be equal to the warehouse operative work in terms of the demands involved. Under equal pay law, work of equal value must be paid equally unless an employer can show that the difference in pay is explained by a reason that is not sex discrimination.

Next argued at the hearing in May this year that market forces explained the pay difference. They told the tribunal that the market rate for a warehouse operative is more than for a sales consultant and that the sex of staff did not come into it. The tribunal rejected this. It held that when there are two labour markets doing equal work, but the mainly male market (warehousing) is paid more than the mainly female market (the stores) because these are the market rates, that reason alone is not a lawful defence to an equal pay claim. The ruling found that there has to be something more to justify the inequality.

Elizabeth George, Leigh Day partner and barrister representing the successful claimants, said: “When you have female-dominated jobs being paid less than male-dominated jobs and the work is equal, employers cannot pay women less simply by pointing to the market and saying – it is the going rate for the jobs. We knew that already. The Employment Tribunal has confirmed employers must go further to justify paying the different rates. They rightly found that Next could have afforded to pay a higher rate but chose not to and that the reason for that was purely financial.

“It is worth reminding people that the financial compensation they will now be entitled to is not a windfall. It is pay that they were always entitled to if Next had complied with its equal pay obligations.”

Next is reported to be appealing the ruling.

Assumptions

Meanwhile, another tribunal found in favour of Nazia Lawrence, a Barclays bank executive, over charges against her male boss, Mark Bell, after she claimed he assumed she was content to remain a vice president due to her family responsibilities. The dispute between Lawrence and Barclays began when she informed managers in 2021 that she could not “focus on or prioritise going for promotion at that time because of the pressing personal issues she was dealing with”. But a tribunal in east London said that her position related to “applying for vacancies” rather than “to her desire for promotion”.

The tribunal went on to find that Lawrence’s comment to her bosses “was purely temporary bearing in mind the personal pressures on her at the time and was not about no longer pushing but simply a matter of priority.” Employment Judge Sarah Moor said: “Mr Bell’s comment . . . reveals he had assumed that the cause of her temporary lack of priority . . . meant she had lost her desire totally for promotion”. Despite Lawrence’s excellent performance and high potential, she was denied promotion opportunities, leading her to file a grievance in January 2022. The tribunal upheld her claim regarding Bell’s assumption but dismissed her broader discrimination allegations.

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