Employment Appeal Tribunal Rules in Favour of Next in Major Equal Pay Case
The Employment Appeal Tribunal has overturned findings against Next regarding equal pay, ruling the retailer successfully justified pay differences between its workforce groups.
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Tribunal Overturns Findings on Equal Pay
The Employment Appeal Tribunal (EAT) has delivered a significant judgment in the ongoing equal pay dispute between Next Retail Limited and thousands of its retail staff. In a ruling handed down by The Honourable Mr Justice Bourne, the EAT overturned an Employment Tribunal decision that had previously held the retailer liable for failing to justify pay differences between its retail sales consultants and warehouse operatives.
Understanding the Legal Dispute
The case involved over 3,500 retail sales consultants who argued that their work was of equal value to that of warehouse operatives. They claimed that the pay gap between the two roles constituted discrimination under the Equality Act 2010. While the initial Employment Tribunal agreed that the roles were of equal value, it later found that Next could not sufficiently justify the pay disparity.
Next relied on a material factor defence, arguing that the pay differences were driven by market forces, recruitment needs, and the specific demands of warehouse operations, rather than the gender of the employees. The EAT reviewed whether these factors constituted a proportionate means of achieving a legitimate business aim.
The EAT Judgment
In his judgment, Mr Justice Bourne concluded that the lower tribunal erred in its assessment. Specifically, the EAT found that the tribunal wrongly characterised Next’s aims as being solely about cost saving. The judge noted that the business rationale for paying higher rates to warehouse staff, including recruitment and retention pressures, did not apply to retail staff in the same way.
The EAT emphasised that the legislation does not require an employer to equalise pay simply because it can afford to do so. Furthermore, the tribunal rejected the claimants' cross-appeal, which had argued that the original decision regarding direct discrimination was flawed. The EAT confirmed that there was no legal requirement for Next to prove that market forces were entirely free from gender bias when they were not the result of discriminatory intent.
Implications for Employers
This decision provides important clarity for businesses navigating complex equal pay claims. It reinforces the principle that employers can rely on objective market factors and recruitment needs to justify pay differentials, provided those factors are distinct and serve a legitimate business purpose. The case serves as a reminder of the nuanced approach required when assessing whether a pay structure is a proportionate means of achieving a legitimate aim.
Read the entire judgment here: Next Retail Ltd v M Thandi & Ors [2026] EAT 130
