Equal pay for equal work? Next!

Old news, right?

We all know that male and female workers should be paid the same for doing the same work.

Recently, however, workers have brought to the attention of the wider public the fact that the law does not just cover equity of pay in the same role. Rather, there are three main types of work which are covered by the Equality Act 2010: ‘like work’, ‘work rated as equivalent’, and ‘work of equal value’.

The Next chapter in equal pay

Hot off the clothes rack is the news that sales consultants working for retail giant, Next, have succeeded in arguing that their role (predominantly carried out by females) is of equal value to the role of warehouse workers (predominantly carried out by males) and therefore should attract the same rate of pay. Whilst there are other similar equal pay claims that have been reported in the press (such as those against Asda and Tesco), this is the first of its kind to have reached tribunal level.

Next’s (mostly male) warehouse workers were paid between £0.40 and £3.00 per hour more than the (mostly female) sales consultants, resulting in an average salary loss to the claimants of more than £6,000 each.

Next, however, had argued that the difference in pay was down to market forces, and reflected the need to recruit and retain 24/7 staffing of warehouses, including for night shifts, Sundays and public holidays, and said that pay rates had been set to ensure the viability of the business.

However, the Employment Tribunal ultimately ruled that Next had failed to demonstrate that lower pay was not the result of gender-based discrimination, and said that financial decisions could not be used as a blanket argument against equal pay rates.

A large bill

The store staff who brought the claim will now be entitled to compensation, going back up to six years from when they submitted their claims, and including the time that has elapsed since then. In addition, all store staff’s basic hourly pay terms will be automatically equalised to the warehouse workers'. Furthermore, the win also extends to providing store staff with paid rest breaks, as well as equal Sunday, Night and Overtime Premiums, in line with comparable terms in the warehouse contracts. A costly mistake for Next!

Pay attention

The Next case is a timely reminder for employers everywhere: it’s not just about keeping an eye on the till but also about keeping an eye on your payroll. The last thing you want is to be blindsided by an equal pay claim because you didn’t spot the differences creeping into your pay structure.

Start by conducting regular audits of your payroll. This will help you spot any potential issues before they turn onto full-blown problems. Just like you would carry out a regular stock-take – better to catch a discrepancy early than to deal with the fallout later. If there are differences, ensure that they are properly justifiable (beyond merely financial reasons).

Transparency is also key: make sure that the criteria for setting pay are clear, consistent, and communicated to your employees. When everyone knows how their pay is determined, it builds trust and reduces the likelihood of misunderstandings or grievances.

Another tip? Encourage open communication. Create a culture where employees feel comfortable raising concerns about their pay without fear of backlash.

Handling Claims with Care

Even with the best intentions, sometimes pay discrepancies do arise. If an employee raises an equal pay concern, don’t dismiss it as just another complaint in the suggestion box. Take it seriously - this is your chance to address the issue before it escalates.

Start by conducting a thorough investigation. Gather the facts, compare the roles in question, and assess whether there’s a legitimate difference in pay. It’s like sorting through returns after a busy sale—methodical, careful, and ensuring nothing’s missed.

If the claim is valid, take swift action to rectify the situation. This might involve adjusting pay rates, offering back pay, or even revisiting your pay structure to prevent future issues. It’s not just about compliance; it’s about doing right by your employees and maintaining their trust.

Staying Ahead of the Curve

The recent ruling in the Next case is a reminder that equal pay isn’t just a legal requirement; it’s a fundamental part of running a fair and successful business. As an employer, you have the power to set the tone - whether it’s by fostering a culture of transparency, regularly reviewing pay practices, or simply listening to your employees.

Remember, the Equality Act 2010 is there to ensure that everyone gets a fair deal, from the shop floor to the boardroom. By staying proactive and committed to fairness, you can keep your business on the right track, avoid costly legal battles, and build a reputation as an employer who truly values their team.

So, let’s raise a shopping basket to equal pay - because when your employees are treated fairly, everyone wins.