Retailer Next has lost an equal pay claim brought by 3,500 store staff and former staff, in the first equal pay group action decision in the private sector
Next paid its sales consultants, who were overwhelmingly women, lower hourly rates than its warehouse operatives. The employment tribunal found this amounted to indirect sex discrimination which could not be justified as having a legitimate and proportionate aim, in Thandi v Next Retail and Next Distribution (Case No 1302019/2018 and others). The average salary loss per claimant is more than £6,000 and Next may need to pay more than £30m compensation.
The tribunal rejected Next’s justification that it needed to pay market rates to recruit warehouse workers but could hire retail staff on lower rates.
According to Lewis Silkin partner Lucy Lewis and managing practice development lawyer Hazel Oliver, ‘Costs alone cannot be used to justify unequal pay—it is not a legitimate aim.
‘The [tribunal] went on to find that, even if this aim was legitimate, it was not proportionate because the business need was not sufficiently great to overcome the discriminatory effect of the lower basic pay. The [tribunal] was concerned that allowing market forces to be a “trump card” would defeat the object of equal pay legislation, by maintaining lower pay in particular sectors due to discriminatory practices in the past.’
Elizabeth George, Leigh Day partner representing the claimants, said: ‘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.’
Leigh Day is currently representing store staff in separate equal pay claims against Asda, Tesco, Sainsbury’s, Morrisons and Co-op.
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