More than 3,500 workers and former employees of Next have won a six-year equal pay claim.
An employment tribunal ruled that Next failed to demonstrate that paying sales consultants (mostly women) – lower hourly pay rates than warehouse operatives (who tend to be men) was not sex discrimination.
According to law firm Leigh Day, which represented the claimants, sales consultants received between £0.40 and £3 less than warehouse workers, and claimants’ average salary loss was more than £6,000 each.
The staff first submitted the claim in 2018, and may now be entitled to back pay going back up to six years. Their basic hourly pay terms will also be equalised in their existing contracts.
Equal pay claims
Only those who brought equal pay claims will be entitled to compensation for lost pay, but Leigh Day will continue to submit claims for consultants not in the original 3,500.
At the hearing in May this year, Next argued that market forces had explained the pay difference between the store workers and warehouse employees, and that sex did not come into pay decisions.
The law firm has already represented thousands of other retail workers in similar claims, including 30,000 shop staff at Tesco, Sainsbury’s and Asda, and a £1bn claim at Morrisons.
Elizabeth George, partner at Leigh Day and barrister representing the claimants, said the group had achieved “something hugely significant”.
She added: “This is exactly the type of pay discrimination that the equal pay legislation was intended to address.
“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.”
Helen Scarsbrook of Eastleigh near Southampton, has worked for Next for more than 20 years and was one of the lead three claimants.
She said: “We did it! We have achieved equal pay for Next sales consultants. 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.
“Anyone who works in retail knows that it is a physically and emotionally tough job. Customer service, in particular, is very demanding and we do that in addition to lots of other essential tasks that go to make Next a successful business. You become so used to having your work undervalued that you can easily start to doubt it yourself.”
Beverley Sunderland, partner at Crossland Employment Solicitors, noted that the decision is not binding, and that any equal pay case would be based on facts.
She added: “It is a useful reminder of the fact that equal pay is not just about men and women doing the same jobs, but whether men and women are doing work of equal value – so roles rated as equivalent by a job evaluation study, or work that’s not similar but is equivalent in terms of effort, skill, and decision-making.
“There have been many equal pay claims brought, particularly in the public sector, where those working in two seemingly different roles, have successfully argued that it is work of equal value.
“Here the employees argued that working in the shops was work of equal value to those in the warehouse and that there was no ‘material factor’ which allowed Next to distinguish the pay rates.”
Next plans to appeal the ruling. In a statement, the company said: “This is the first equal pay group action in the private sector to reach a decision at tribunal level and raises a number of important points of legal principle.”
It added that no cases of direct discrimination had been upheld, and that the tribunal had found “there was no conscious or subconscious gender influence in the way Next set pay rates”.
Keely Rushmore, employment partner at Keystone Law, added: “Paying the ‘market rate’ for a role has in the past been relied on – and accepted – as a defence to equal pay claims, but this case highlights the dangers of doing so. If the pay for a predominantly female role has historically been lower due to perceptions of what amounts to ‘women’s work’, then the market rate itself may be inherently discriminatory and in breach of equal pay principles.
“These cases will always be fact-specific. As it was at employment yribunal level, it is therefore not a binding decision, with Next indicating it will appeal the outcome. However, it is estimated that the amount due to the Next claimants is more than £30 million, with reports that there are over 100,000 additional claimants waiting in the wings to bring claims against it and other large retailers.
“Given the high stakes, employers should review their pay rates carefully, and consider whether they need to undertake a formal job evaluation process, potentially with external professional input.”
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