The Employment Appeal Tribunal found that Next’s reason for the difference in pay was justifiable, overturning a landmark 2024 ruling that found it was “not reasonably necessary” for the company to pay its warehouse staff more.
More than 3,500 current and former employees had brought a claim against the company over equal pay for a period between 2012 and 2023.
Lawyers for the group had said that because shop workers were mostly female and warehouse staff were mostly male, the difference in pay amounted to a form of sex discrimination.
However, the latest ruling found Next was justified in paying higher rates due to “recruitment and retention factors which did not apply to the retail workers”.
In a judgement on Monday, Mr Justice Bourne said: “Next paid the rates to warehouse staff which it needed to pay for sound business reasons, and no more, and those business reasons did not apply to the retail staff.”
Leigh Day, the law firm representing the claimants, described the decision as “disappointing” and said it planned to appeal.
Meanwhile, a spokesperson for Next called the ruling “a victory for common sense”, adding that a contrary ruling “would have represented a hammer blow to retail employment in the UK”.
They said: “Had the judgment gone against Next, it would have created a threat to the ongoing viability of many of our stores.
“It would also have had the perverse effect of putting retailers who operate their own warehousing at a material disadvantage to competitors who contract out their warehouse operations, which makes no sense.”
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Elizabeth George, a partner at Leigh Day, said: “Next pays market rates in both its stores and its warehouses in order to recruit and retain staff.
“The market rate is higher in the predominantly male warehouse labour market, even though the work carried out in stores has already been found to be equal work.
“If an employer need only show it pays the market rates to justify pay discrimination, the very market conditions that give rise to the discrimination then become the legal justification.
“While the store staff and their legal team welcome many aspects of this appeal judgment, we respectfully disagree with this approach to justification.”
