Investment commentators have welcomed the employment tribunal decision that ruled over 3,500 shop workers at British retailer Next – the majority of which are women – were not paid fairly after a six-year legal battle.
The tribunal found on Tuesday (27 August) found Next had failed to show that paying its sales consultants, overwhelmingly women working in stores, lower pay rates than its warehouse workers was not sex discrimination. The retailer could have afforded to pay a higher rate but chose not to for purely financial reasons, said the claimants’ representation.
Helen Scarsbrook, one of the three lead claimants, told Reuters: “It has been a long six years battling for the equal pay we all felt we rightly deserved but today we can say we won.”
Elizabeth George, partner at solicitors Leigh Day representing the shopworkers, added: “When you have female dominated jobs being paid less than male dominated jobs and the work is equal, employers cannot pay women less simply by pointing to the market and saying – it is the going rate for the jobs,” she said.
Leigh Day is also representing 112,000 staff from Asda, Tesco, Sainsbury’s, Morrisons and Co-op in similar cases, and said the result from the Next tribunal was a “huge encouragement”.
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James Alexander, CEO of UKSIF, commented on the case highlighting the risks to businesses and investors when workers’ rights are overlooked.
“Ensuring high standards of workers’ rights, including equal pay, is good business sense. This case demonstrates the material risk to businesses, and therefore to investors, associated with failing to maintain rigorous standards of employee pay and conditions. This decision further underlines the importance of workers’ rights in investors’ decision-making, both before making an investment and then in the boardroom.”
Meanwhile, Bev Shah, co-CEO at City Hive, reiterated this is an issue for investors: “Professional investors with influence in the boardroom, regardless of being passive or active, should be monitoring that labour laws are complied with, that workers are treated fairly, and should be also ensuring the business is accountable for the right costs of doing business.
“Investors need to know the right questions to ask to understand the nuances of social issues. Otherwise, they are failing to analyse these sufficiently.”
According to Morningstar, the asset managers featured in the top owners of Next stock include Capital Group, Fidelity, Invesco and T. Rowe Price.
Next intends to appeal the decision and flagged the tribunal had rejected the majority of the claims, including those surrounding direct discrimination and bonus pay.
“This is the first equal pay group action in the private sector to reach a decision at Tribunal level and raises a number of important points of legal principle,” it said in a statement.
