Following a 6-year long legal battle, the case of Ms M Thandi and Others v Next Retail Ltd and Next Distribution Ltd: 1302019/2018 and Others has finally been decided by an Employment Tribunal. In a monumental decision, 3,500 current and former store staff hired by national retailer Next have had their claims for equal pay upheld. It is estimated, Next may have to pay in excess of £30 million to those affected. This landmark case is the first time an equal pay claim of its type against such a well-known retailer has not only gotten to a full hearing, but also has resulted in a win for the claimants.
In its ruling, the Employment Tribunal clearly set out how Next had failed to show that in paying their retail consultants, a predominantly female workforce with 77.5% of retail consultants being female during the relevant period, an hourly rate that was proportionally lower than that received by their warehouse operatives, a role that was held by a higher proportion of men, was not sex discrimination. The Tribunal heard how female retail consultants were paid a difference ranging from £0.40 to £3.00 per hour compared to their warehouse operative counterparts.
Throughout the case, Next had maintained the differences in pay were down to a “costs only” aim, where the company looked to maintain and maximise profits. The Tribunal found that this aim was not legitimate, and even if it had been, the business need did not outweigh the discriminatory effect the differences in pay had. While the Tribunal found that the reasons provided for the difference did not amount to direct sex discrimination, as Next’s primary concern was profit not gender, the actions did amount to indirect discrimination under S.69 (1)(b) of the Equality Act 2010.
The landmark win for the store staff will leave those effected entitled to compensation taking the form of back pay going back up to six years from when they first brought their claims and includes the time that has elapsed since. In addition to this, their current basic hourly rates, as set out in their existing employment contracts, will automatically be equalised with those of their warehouse counterparts. The legal success will also see the shop staff receive paid rest breaks and equal Sunday, Night and Overtime Premiums in line with those set out in the warehouse contracts. Currently, only those listed as bringing claims will be eligible to compensation, it is expected that more claims will be submitted in light of this win.
The success of this decision has huge implications for employees and employers up and down the country, with similar equal pay claims being brought by store staff against major supermarkets. While these claims will all be decided upon their own merit, the decision given in this case will surely act as welcome encouragement in the fight for equal pay.
