Next has been successful in appealing the equal pay litigation ruling made in 2024 by the Employment Tribunal (“ET”). See our previous article on this case here.

This article summarises the findings of the Employment Appeal Tribunal (“EAT”) in overturning this significant decision.

Background to the Appeal

In a 2024 first instance ET decision, thousands of female retail sales consultants (the “Claimants”) succeeded in their equal pay claims against Next. The Claimants alleged that, as a predominantly female workforce, they were paid less than warehouse operatives, a predominantly male workforce, despite performing work of equal value.

The ET made this decision based on the following considerations:

• The Claimants were carrying out work of equal value to the warehouse staff.
• The pay difference was not directly discriminatory – all warehouse staff received the same pay regardless of their sex, as did all sales staff.
• However, the higher rates of pay afforded to warehouse workers amounted to indirect discrimination as paying warehouse staff more than sales staff had a disproportionate effect on women. The ET relied on statistical evidence and the fact that Next benchmarked pay against the market and the warehouse labour market had a significant imbalance favouring men.
• Next failed to establish the material factor defence. This defence allows an employer to demonstrate circumstances that justify the pay differences which are unrelated to any discriminatory reason. The ET...

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