Next on the agenda – the fight for equal pay within the retail sector
Next has become the latest retailer to find itself involved in equal pay campaign after shop floor staff submitted hundreds of claims to the Employment Tribunal.
More than 400 shop workers, most of whom are female, from fashion and homeware stores Next have brought an equal pay claims against their employer. The employees argue that their work on the shop floor is as demanding as distribution centre and warehouse roles and therefore, they should be renumerated the same as the company’s warehouse workers who are predominately male.
It is claimed by those retail store workers that they earn on average between £2 and £6 less per hour than their male comparators, the distribution and warehouse centre workers.
There are three stages to a successful dispute regarding equal pay. This decision reflects the first of the three stages. The second part of the process will be to decide if the roles in question are of equal value (not necessarily the same work). If this is successful, the third part to the process will be to ascertain if there is a reason why the roles should not be paid equally.
Next has conceded that the two types of role (store workers and warehouse staff) can be compared allowing the second stage of a three-stage equal pay claim to commence. The retailer will now have to show that the roles are not of equal value, or if they are, that there is a reason, other than gender, as to why the roles are not paid at the same rate.
Even though the equal value part of the claim is already under way, it could be years before a final decision with any awards being backdated for up to six years. As the business employs 25,000 store staff across 500 stores in the UK and Ireland, the potential payback cost to the company could be in excess of £30m if all eligible staff joined the claim.
This decision is similar to the decision for those employees in Asda stores. In March 2021, the Supreme Court ruled that for the purposes of equal pay, the work of mainly male distribution workers can be compared to the mainly female shop floor workers. Although these decisions are significant and could have considerable consequences to come there is a long way to go before the full equal pay claims succeed.
Both the Asda and Next rulings show that there will be implications for supermarkets and of course other shops across the retail sector which have analogous business models to Asda and Next namely a business that employs both warehouse and shop floor staff but pays them differently. Co-op, Morrisons, Sainsbury’s and Tesco are also currently engaged in equal pay disputes and therefore, supermarkets and retailers could find themselves liable to a considerable amount of payback to those affected workers if there is inequality in terms of pay.
This ongoing class action is a reminder to employers, not just supermarkets, that they should be mindful to ensure there is consistency and equality within the workplace in regard to pay in order to avoid equal pay claims of a similar nature. It is also a reminder that employers should look at the “value” of the work being undertaken and look to be on the front foot in terms of equal pay to avoid an assumption that pay differences are because of gender.