Thandi and ors v Next Retail Ltd and anor

Background

Equal pay claims are very complicated and are relatively rare in the motor industry, however this case is a warning that claims can succeed where work is held by the Tribunal to be of equal value.

Facts

Equal pay claims were made by over 3,500 (predominantly female) Claimants who worked at Next retail stores, whose comparators were men working in Next warehouses. 

In respect of some pay terms, including basic pay, the Respondents had failed to establish a material factor defence under S.69(1)(b) of the Equality Act 2010. The factors that were relied upon to explain the difference in basic pay adversely affected women disproportionately to men. Furthermore, the aims behind those factors masked a ‘costs only’ aim that was not legitimate. The Claimants’ employer could have afforded to pay a higher rate of basic pay to retail staff, as some competitors did, but paramountcy was given to keeping labour costs to a minimum in order to maintain and maximise profitability. Even if this were a permissible aim, the tribunal considered that the payment of different sums of basic pay was not reasonably necessary to meet it. The business need was not sufficiently great as to overcome the discriminatory effect. For market forces to be a trump card in this way would defeat the objective of the legislation. The Respondents’ defence under S.69(1)(b) was, however, successful in respect of certain bonuses and premiums paid to warehouse workers

Comment

The case is a reminder to employers to be aware of situations in their own businesses, particularly where certain sectors of the business are predominantly female, and it may be advisable to carry out reviews in order to check that the business is not at risk of an equal pay challenge.

Clearly, these days, evidence of female employees being paid less than male employees for the same or similar job, is likely to be the exception, however as above, claims can still be brought on the basis that even if jobs are different, they are effectively of “equal value”.