Several thousand former and current Next employees have won a landmark equal pay claim against the high street retailer after a six-year legal battle.
An employment tribunal involving 3,540 claimants has ruled that Next failed to demonstrate that the lower basic wage paid to sales consultants compared with warehouse operatives was not the result of sex discrimination.
Between 2012 and 2023, the period examined by the tribunal, 77.5% of retail consultants at the fashion and homeware retailer were female, and 52.75% of warehouse operators were male, according to the ruling.
Under equal pay law, work of equal value at the same company must be paid equally unless an employer can demonstrate that the difference in wage is because of a “material factor” that is not sex discrimination.
During the tribunal, Next argued that the difference in the wages for the two roles was because the “market rate” for a sales consultant versus a warehouse operator was different and to ensure the “viability” of the business.
The tribunal accepted the discrepancy in pay between the roles was not because of “direct discrimination”, including the “conscious or subconscious influence of gender” on pay rate decisions, and instead was driven by efforts to “reduce cost and enhance profit”.
It ruled that the “business need was not sufficiently great as to overcome the discriminatory effect of lower basic pay” and that “there must usually be a more compelling business reason for such arrangements to be justifiable”.
In a statement, Next said it intends to appeal against the ruling.
This is the first equal pay claim of its type against a national retailer to secure a win, said Leigh Day, the law firm representing thousands of claimants.
Helen Scarsbrook, 68, from Eastleigh near Southampton, who has worked for Next for more than 20 years and was one of three lead claimants representing all the sales consultants in the claim, said customer service was “demanding” and often “undervalued”.
In a statement issued through Leigh Day, she said: “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.
“I am so grateful to the judges for seeing our jobs for what they really are – equal.”
Elizabeth George, Leigh Day partner and barrister representing the successful claimants, said the ruling was “hugely significant” and the case was “exactly the type of pay discrimination that equal pay legislation was intended to address”.
She continued: “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.”
In a statement, Next said: “The tribunal rejected the majority of the claims made by the claimants, in particular all claims of direct discrimination, and all aspects of the claims made in respect of bonus pay.
“The tribunal expressed serious criticisms of the claimants’ expert evidence, and overwhelmingly accepted the evidence of Next’s expert and fact witnesses.
“In respect of the specific terms in which the claim succeeded, it is our intention to appeal.
“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.”
More than 112,000 store staff across supermarket chains Asda, Tesco, Sainsbury’s, Morrisons and Co-op are being represented by Leigh Day bringing “similar equal pay claims”, the law firm said.
Next operates 466 stores in the UK and employs 22,873 sales consultants, the tribunal ruling said.
In 2023, the company’s retail profits were £241 million and its online profits were £467 million, according to the ruling.