Several thousand former and current Next employees have won a landmark equal pay case against the retailer following a six-year legal battle.
An employment tribunal with 3,540 claimants has ruled that Next has failed to prove that the lower basic wage paid to sales consultants compared to warehouse workers is not the result of gender discrimination.
Between 2012 and 2023, the period examined by the court, 77.5 percent of the fashion and home goods retailer’s retail consultants were female and 52.75 percent of its warehouse employees were male, the ruling states.
Under the Equal Pay Act, equal pay must be paid for work of equal value in the same company unless the employer can prove that the pay difference is due to a “material factor” that does not constitute sex discrimination.
In court, Next argued that the difference in pay for the two positions was because the “market rate” for a sales representative was different from that for a warehouse worker and was to ensure the “viability” of the business.
The court acknowledged that the pay differences between roles were not due to “direct discrimination”, nor to the “conscious or unconscious influence of sex” on pay decisions, but rather to an effort to “reduce costs and increase profits”.
It ruled that “the commercial necessity was not great enough to offset the discriminatory effect of a lower basic salary” and that “there must usually be a more compelling commercial reason for such arrangements to be justified”.
Next said in a statement that it intends to appeal the ruling.
This is the first successful equal pay case of its kind against a national retailer, said Leigh Day, the law firm representing thousands of plaintiffs.
Helen Scarsbrook, 68, from Eastleigh, near Southampton, who has worked for Next for over 20 years and was one of three lead claimants representing all sales advisers in the claim, said customer service was “demanding” and often “undervalued”.
In a statement released via Leigh Day, she said: “It has been six long years of fighting for the equal pay we believe we deserve, but today we can say we have won.”
“Anyone who works in retail knows that it is a physically and emotionally demanding job.
“Customer service in particular is very demanding and we do it in addition to many other important tasks that make Next a successful company.
“You get so used to your work being undervalued that you easily start to doubt it yourself.
“I am so grateful to the judges for seeing our jobs for what they really are: equal.”
Elizabeth George, a partner at Leigh Day and lawyer for the successful claimants, said the ruling was “hugely significant” and that the case involved “exactly the kind of pay discrimination that equal pay legislation is designed to address”.
She continued: “If female-dominated occupations pay less than male-dominated occupations and the work is the same, employers cannot pay women less simply by pointing to the market and saying that’s the going rate for those occupations. We already knew that.”
“The Employment Tribunal has confirmed that employers must take further steps to justify paying the different rates.
“You rightly noted that Next could have afforded a higher price but did not want to and that the reason for this was purely financial.
“It is worth reminding people that the financial compensation they are now entitled to is not a windfall.
“It is a payment they would always have been entitled to if Next had met its equal pay obligations.”
In a statement, Next said: “The Court has dismissed the majority of the claims raised by the plaintiffs, in particular all claims of direct discrimination and all aspects of the claims relating to bonus payments.”
“The Court was severely critical of the claimants’ expert evidence and overwhelmingly accepted the evidence of Next’s experts and specialists.
“In view of the specific circumstances under which the action was successful, we intend to appeal.
“This is the first class action lawsuit on the issue of equal pay in the private sector to be decided in court. It raises a number of important legal questions of principle.”
More than 112,000 store employees at supermarket chains Asda, Tesco, Sainsbury’s, Morrisons and Co-op are represented by Leigh Day and are making “similar demands for equal pay”, according to the law firm.
Next operates 466 stores in the UK and employs 22,873 sales consultants, the tribunal’s decision states.
In 2023, the company’s retail profits were £241 million and its online profits £467 million, according to the ruling.
