In a groundbreaking decision, Next has been ordered to compensate its predominantly female store staff following a six-year legal battle over equal pay. The ruling, issued by an employment tribunal, mandates that the British multinational retailer should have provided its shop employees with the same hourly rates as their warehouse counterparts, who are mostly male.
The verdict, delivered in August 2024, marks a significant milestone in the UK retail sector's ongoing struggle with pay equity. Over 3,500 current and former Next employees are now eligible for compensation, dating back to 2018 when the claim was initially filed. Legal representatives estimate the potential cost to Next could exceed £30 million.
This case represents the first successful claim of its kind against a national retailer, potentially setting a precedent for similar disputes across the industry. Currently, lawyers are representing more than 112,000 store staff in comparable claims against other major UK supermarkets, including Asda, Tesco, Sainsbury's, Morrisons, and Co-op.
Next, founded in 1982 and known for its clothing, footwear, and home products, has announced its intention to appeal the ruling. A company spokesperson emphasized the significance of the case, stating:
"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."
The tribunal's findings revealed that while there was no conscious gender bias affecting basic pay rates, the company's focus on cost reduction and profit enhancement resulted in discriminatory pay practices. Under UK equal pay law, work of equal value must be compensated equally unless an employer can prove the salary difference is not due to sex discrimination.
Helen Scarsbrook, a 68-year-old Next employee of over two decades and a leading claimant in the case, expressed her gratitude for the ruling. She plans to use her compensation, likely amounting to several thousand pounds, to pay off her car loan, take a holiday, or possibly retire. Scarsbrook emphasized the physical and emotional demands of retail work, stating:
"You become so used to having your work undervalued that you can 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 and barrister at Leigh Day representing the claimants, highlighted the importance of the ruling in addressing market-based justifications for pay disparities between male and female-dominated roles.
As of 2023, Next operates approximately 500 stores in the UK and Ireland, with an additional 200 stores across 40 countries worldwide. The company, listed on the London Stock Exchange and a constituent of the FTSE 100 Index, employs over 43,000 people globally. In the fiscal year 2022/2023, Next reported a revenue of £5.1 billion, showcasing its significant presence in the retail market.
This landmark case underscores the ongoing challenges in achieving pay equity in the retail sector and may prompt other companies to reassess their compensation practices to ensure compliance with equal pay legislation.