Thandi and others vs Next Retail Ltd and another

Shop floor work found to be of equal value to warehouse work - Thandi and others v Next Retail Ltd and another ET/1302019/18

In a crucial and perhaps landmark decision, over 3,500 former and current staff at Next have been successful in the Employment Tribunal in an equal pay claim. It was found that workers within Next stores, whom in the period considered by the Tribunal were 77.5% female, were unfairly paid at lower rates than workers in warehouses, of whom 52.75% were male.

Whilst there was not found to be direct discrimination as the reason for the difference in pay, the Tribunal did rule that there had been indirect discrimination – rejecting the position put forward that the  ‘market standard’ explanation that rates of pay in warehouses were generally higher than in retail, as well as justifications around recruitment and retention, and business viability and productivity. The statistic of the number of shop workers who were female, and warehouse workers who were male was enough to show that paying the retail workers less had a disproportionate impact on women, particularly when taken together with the fact pay benchmarking was done against a wider warehouse market with a largely male workforce. It was clear that Next could have afforded to pay their shop floor workers more, they simply chose not to do so – therefore cost cutting was the actual reason for the differences and there was therefore no objective justification for the indirect discrimination.

The tribunal made it clear that costs reasons also do not provide legitimate justification for unequal pay. To allow so would undermine the purpose of the Equal Pay legislation, and there was concern that market forces would therefore be a “trump card” in defending unequal pay.

This marked a significant step in a case which has been ongoing for six years and has been estimated to potentially cost Next in the region of £30 million, inclusive of back-payments. Next have indicated their intention to appeal the decision.

What does this mean? Asda, Tesco, Morrisons, Sainsbury’s and the Co-Op all have similar and current ongoing cases, with this judgment undoubtably signalling the possible outcomes, where like-rationales have been used. It is also predicted that the outcome could have a knock-on impact on other industries/workers pursuing claims for equal pay.

In the immediate future, time will tell as to whether Next will be able to successfully appeal the judgment. It was reported that their pre-tax profits for 2023 were £913 million, meaning the prospect of paying out on such claims, and funding the appeal process, are all consideration points.