Next has won a key appeal, allowing it to continue paying warehouse workers a higher hourly rate than shop floor staff in a long-running equal pay dispute.
The Employment Appeal Tribunal has overturned a significant part of a landmark ruling from 2024, which had determined that the retailer was incorrect in paying its warehouse staff more in basic pay than its shop floor workers for jobs deemed of equal value.
This original judgment meant that over 3,500 current and former employees, predominantly women, were in line to share potentially more than £30 million in back pay.
Following Next's appeal, Leigh Day, the law firm representing the store workers, expressed disappointment with the outcome regarding basic pay and stated its intention to appeal the decision.
The tribunal accepted Next's justification for the higher rates, citing recruitment and retention challenges specific to warehouse roles.
Next hailed the decision as a "landmark victory," emphasizing its success on the "key issue of basic pay."
In a statement, the company explained: "The importance of this decision is that the Appeal Tribunal has confirmed that it was justifiable for Next to rely on market forces to distinguish between different groups of employees, where there was a good rationale to pay one group more than the other.
"In this case, Next had to pay a higher market rate to warehouse operatives because of recruitment and retention pressures, which did not apply to the workforce in its stores. Next believes this element of the judgment is not only correct in law, but also a victory for common sense.
"The judgment affirms a principle at the heart of any effective employment market - that employers must be able to pay what is necessary to recruit the people they need; and that doing so does not oblige them to raise the pay of other employees where there is no reason to do so."
Leigh Day confirmed that the judges did uphold the 2024 findings concerning night-time premiums, overtime premiums, and paid rest breaks.
Next has indicated it will now seek permission to appeal these upheld decisions.
Both the initial Employment Tribunal and the Appeal Tribunal concluded that there was no direct sex discrimination in Next's pay rates, despite shop floor staff being predominantly women and warehouse workers predominantly men.
The outcome raises questions about whether it could set a precedent for similar cases across the industry. Major retailers such as Tesco, Asda, Morrisons, and Sainsbury's are involved in comparable long-standing claims and are expected to scrutinize these findings closely.
Last year, thousands of female workers at Birmingham City Council received a long-awaited equal pay settlement. Brighton and Hove City Council is also facing over 1,000 equal pay cases.
