A recent tribunal has seen retailer, NEXT in dispute with female employees regarding equal pay.
Did you know that the UK’s equal pay law has a default position that men and women must get ‘equal pay’ compared to each other if they are performing equal work? Acas explain that by law, ‘equal work’ counts as either:
The retailer NEXT is now facing potential backpay claims of up to £30 million concerning unequal pay.
Following a 6-year equal pay action against the retail store, brought against them by a female employee, experts are saying that this ruling could ‘shine a light’ on gender segregation in the private sector. This could have a huge rippling effect, especially on larger retailers such as ASDA, TESCO, etc.
A recent tribunal ruling concluded that between 2012 and 2023 77.5% of NEXT’s retail consultants were female and 52.75% of warehouse operators were male but that there was a pay difference in the favour of the warehouse operatives. NEXT was unable to demonstrate that their reason for this was NOT sex discrimination and maintained that the warehouse role receiving higher pay was justifiable.
The law firm that represented the claimants in this case demonstrated that there was a difference ranging from 40p to £3, with the claimants’ average salary loss being more than £6,000 each.
It was argued that sales consultation work was of equal value to NEXT’s warehouse-based employees, who were predominantly male. NEXT argued that the salary disparity was driven mainly by market factors, not sex, however, the tribunal pushed back. Whilst accepting that the pay difference and difference in pay rates was not direct discrimination, the tribunal added that ‘There was no conscious or subconscious influence of gender which affected the basic rates of pay. The drive and imperative was to reduce cost and enhance profit’. It added that there must be a more compelling reason for such arrangements to be justifiable.
When making an equal pay claim, employees will need to show that the comparator is appropriate in that they are carrying out ‘like work’ or ‘work of equal value’. If they are, to defend the claim, the employer will need to be able to show a material factor that justifies the difference in pay. A material factor can include things such as market forces, geographical location, and flexibility. Whilst the burden of proof sits with the employee at the beginning, if strong enough it will be down to the business to then demonstrate otherwise.
As set out in the Equality Act 2010, men and women working for the same employer who are performing equal work must (as per criteria above) receive equal pay, unless any difference in pay can be justified. It is the law and employers must follow it.
Employees can apply to the Tribunal Service however, they must do this within three months of the discrimination taking place or within six months if it is about unequal pay. Tribunals can award compensation for unlawful sex discrimination. This means the employee is likely to still work with you or has recently left.
To find out more information or if you require support ensuring equal pay in your organisation get in contact with our team of experts.
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