Thousands of current and former employees at British clothing retailer Next Plc won an equal pay claim in a ruling that could have significant repercussions for similar cases in the country.
The employment tribunal said in a ruling published on Tuesday that Nextâs in-store sales workers, who are mostly women and paid lower hourly rates, were put at a particular disadvantage when compared with men doing equal work.
The decision means the retailer could be forced to pay more than £30 million ($39.7 million) in back pay to 3,540 claimants, according to Leigh Day & Co., the legal firm representing the retail workers.
The legal victory, the first of its kind against a national retailer in the UK, is an indication of the risks facing the UKâs five major supermarkets, which face a similar equal pay claims from 112,000 workers. J Sainsburys Plc, Tesco Plc and W Morrison Supermarkets Ltd, Asda Group Ltd and Co-operative Group Ltd are all the subject of similar claims from workers represented by Leigh Day, which could cost the retailers billions of pounds if successful.
Next argued that pay rates for warehouse workers were higher than for retail workers in the wider labour market and that discrepancies reflected the need for 24/7 staffing in its warehouses, including during public holidays.
The company intends to appeal the result. âThis 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,â the retailer said in a statement.
In 2023 an employment tribunal in Leeds ruled that the work done by retail workers at Next was equal to the warehouse operative work in terms of the demands involved. Almost 78 percent of its sales workers were women, while 53 percent of warehouse employees were men.
In its most recent ruling, the tribunal agreed with Next that the difference in pay was not the result of direct discrimination, or due to the âconscious or subconscious influence of gender in setting payâ but stated that the companyâs aim to cut costs and boost profits could not be used to justify unequal pay.
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.
Last year Birmingham City Council, the largest local authority in Europe, effectively declared bankruptcy after being hit by a crippling bill of up to £760 million from an equal pay claim.
Those pay discrepancies were likely present in other local authorities, according to GMB, the union that represented workers in Birmingham, potentially deepening an ongoing funding crisis in local government.
By Jack Ryan
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