Next ruling exposes vulnerability of private sector to equal pay claims

While the details are extremely complex, the broad picture is that Next’s predominantly female shop workers are paid less than their warehouse-based colleagues, of whom a majority are men. In an earlier ruling the employment tribunal had confirmed that their work and that of the male comparators they had chosen was of equal value for equal pay purposes.

However, Next had one final argument up its sleeve, which is that the difference in pay was due to a “material factor” which had nothing to do with sex discrimination.

The point was that Next found it much more difficult to attract and retain warehouse staff, and it therefore had to pay “market rates” which were higher than those for staff working in its shops.

While Next was successful in defending some of the more targeted incentives, its argument failed in relation to basic pay. That was mainly because these market rates were derived from a predominantly male workforce in the warehouse sector as a whole.

That means that the basic pay of all the claimants will have to be levelled up to that of their warehouse worker comparators, though there are some complicated calculations to be done to assess what each individual claimant will receive in back pay and interest.

Next has indicated that it plans to appeal, so it is likely that the implementation of this decision will be put on hold pending a hearing before the Employment Appeal Tribunal.

The story is not over yet, but this latest ruling will offer considerable encouragement to the supermarket claimants, whose claims are based on very similar arguments.

There are also other areas of the private sector where there is a degree of gender-based occupational segregation. Care work and hospitality are obvious examples.

The message is that simply allowing the labour market to dictate rates of pay may not be a good enough defence to equal pay claims, where lower paid but equally valuable roles are performed predominantly by women. It may prove to be necessary to pay some workers more than the going market rate in those circumstances.