In a landmark ruling, high street giant Next has found itself at the centre of a significant equal pay case. The outcome not only highlights the ongoing challenges in achieving workplace equality but also sets a precedent that could reshape how organisations approach pay structures across different roles.
The Case in Summary
The equal pay claim against Next began in 2018 when a group of predominantly female (77%) sales consultants argued that their work was of equal value to that of the predominantly male (52%) warehouse workers.
Despite the roles being quite different, the claimants contended that they deserved equal compensation. Next’s defence, citing market factors as the reason for pay discrepancies, was ultimately rejected by the tribunal.
While the tribunal acknowledged that there was no direct discrimination, it ruled that market rates alone were insufficient justification for pay differences in roles of equal value.
This decision marks the first successful group claim of its kind in the UK retail sector, with over 3500 individuals coming forward.
Key Lessons from the Next Equal Pay Ruling
1. Equal value doesn’t mean identical roles
The ruling highlighted that you don’t need to be in identical or very similar jobs for an equal pay claim to succeed.
A role on the shop floor at Next is seemingly very different to a warehouse based role. Nonetheless, this was still a successful equal pay claim. This proves that employees can compare their roles to others in different departments if they can clearly establish how and why the work is of equal value.
2. Retail sector under scrutiny
We know that similar role comparisons exist in most big retail organisations. And we have even seen similar cases taking place in supermarkets like Asda, Sainsbury’s and Tesco.
This suggests that there might be similar equal pay claims coming in the future—within the retail sector and beyond—that could potentially be steered by the outcome of this case.
Not only that, but the publicity of this case will undoubtedly help educate the wider public on the topics of equal pay and work of equal value. As a result, this opens up the possibility of more employees who feel they are being unfairly paid coming forward.
3. Potential impact on the gender pay gap
Part of the reason the pay gap exists is because some male dominated roles might be paid more in the market compared to female dominated jobs. This is despite them potentially being considered of equal value under a job evaluation scheme.
The fact that the tribunal’s decision in this case challenged the use of market rates alone to justify pay differences could help to bridge the gap over time.
It also highlights the need for employers to reassess how they determine pay rates, especially in male vs female-dominated roles.
4. Reviewing pay policies and structures
Historically, market rates were often accepted as justification for pay differences. However, the tribunal’s decision signals a shift away from this practice. It’s likely that organisations will now have provide more comprehensive reasonings.
As a result, some organisations will need to review their pay policies or structures to ensure that there is compliance and fairness. This may include ensuring that they have a gender neutral job evaluation scheme. This will enable them to look at equal pay for equal work and ensure that any differences in pay are justified by factors that are not just down to market rates.
Embracing Fair Pay Practices
The Next equal pay case serves as a wake-up call for many UK employers. It underscores the importance of transparent, fair, and justifiable pay practices.
The ruling also reinforces the need for organisations to:
- Conduct thorough, gender-neutral job evaluations across all roles
- Regularly review and update pay structures
- Ensure transparency in pay decisions
- Implement robust policies to address potential pay disparities
While Next has announced its intention to appeal the decision, the case has already sparked important conversations about workplace equality and fair pay. Regardless of the appeal’s outcome, the principles highlighted by this case will likely shape the future of pay practices in the UK.