NEXT wins key equal pay appeal as tribunal backs higher warehouse wages

NEXT has won a key part of its appeal against an equal pay ruling, after the Employment Appeal Tribunal found that higher pay for warehouse workers was justified. However, workers retained several findings against the retailer relating to other pay practices.

According to the Financial Times, the Employment Appeal Tribunal has ruled that NEXT was justified in paying warehouse workers higher basic hourly rates than its predominantly female store workers, overturning part of a 2024 ruling that had strengthened a multibillion-pound equal pay battle across the UK retail sector.

NEXT argued that it needed to pay warehouse staff more to recruit and retain them, despite the roles having previously been assessed as being of equal value to store work. The Employment Appeal Tribunal agreed that these market forces provided sufficient justification for the difference in basic pay.

However, the tribunal upheld previous findings against NEXT over lower rates for night and Sunday shifts, overtime and paid rest breaks. The Sunday dispute issue will return to the Employment Appeal Tribunal for further consideration.

Leigh Day, which represents thousands of current and former NEXT workers, said the decision on basic pay was “disappointing”. Partner Elizabeth George argued that if employers only need to show they pay market rates to justify differences, “the very market conditions that give rise to the discrimination then become the legal justification”.

NEXT described the ruling as a “landmark victory”, saying it confirmed that employers can rely on market forces where there is a good rationale for paying one group more than another. It said the alternative could have threatened “the viability of many of our stores”.

The retailer plans to seek permission to appeal against the remaining findings.

The case has wider implications for the UK retail sector, with similar equal pay claims facing major supermarkets including Tesco, Asda, Morrisons and Sainsbury’s. According to the FT, Tesco’s potential compensation bill could approach £4 billion based on one Leigh Day estimate.

The NEXT case involves thousands of current and former store workers, with the basic pay difference during the claim period from 2012 to 2023 ranging from 38p to £3.13 per hour.

The ruling comes as retailers face increasing scrutiny over gender pay disparities and could also have wider relevance as European governments prepare to implement new EU pay transparency requirements.