Over 3,500 Next workers win landmark five-year legal battle over equal pay
OVER 3,500 Next workers have won a legal battle for equal pay in a landmark case.
Shop staff, who are predominantly women, argued they should not have been paid at lower rates than the predominantly male warehouse staff.
An employment tribunal has now ruled the retail giant should have paid them the same.
Under equal pay law, staff cannot be paid differently for work of equal value unless there is an explanation other than sex discrimination.
Lawyers at Leigh Day, representing Next staff, found the pay gap ranged from 40p to £3 an hour — adding up to a loss of £6,000 on average.
The law firm has estimated that Next could now have to fork out £30million to cover backdated pay — sending the FTSE retailer’s share price dipping by 1 per cent.
Next yesterday said it will appeal against the findings, and highlighted that the tribunal found “no conscious or sub-conscious gender influence in the way Next set pay rates”.
The ruling may spook other major British retailers who are facing similar equal pay disputes, which has cast a shadow over the sector for the past five years.
Leigh Day has similar cases with more than 112,000 store staff across Asda, Tesco, Sainsbury’s, Co-Op, and Morrisons.
However, legal experts were quick to note that yesterday’s ruling was not legally binding and would therefore not set a precedent for other cases.
Sainsbury’s and Tesco’s shares also rose yesterday, suggesting investors had confidence that they would not immediately face a similar outcome.
Next had argued that “market forces” had influenced the pay gap due to a greater demand for warehouse workers, resulting in higher rates.
A spokesman said: “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.”
But lead claimant Helen Scarsbrook, 68, from Eastleigh, Hants — who worked for Next for more than 20 years and helped represent all sales consultants in the claims — said customer service was “demanding” and “undervalued”.
Leigh Day partner Elizabeth George said: “It is worth reminding people that the financial compensation that they will now be entitled to is not a windfall.
“It is pay that they were always entitled to if Next had complied with its equal pay obligations.”
VITAMIN FIRM BULKS UP FOR £500M LAUNCH
SPORT supplement and vitamin business Applied Nutrition plans to muscle in on the London Stock Exchange, confirming yesterday it plans a flotation before the year’s end.
The firm — which counts Coleen Rooney as a brand ambassador — is touted for a £500million valuation.
Andrew Bell, founder of broker AJ Bell, has been tapped up as chairman.
Applied Nutrition grew sales by 42 per cent in the past year to £86.2million and boss Thomas Ryder said the City was an “exceptional home” for growth companies.
GEIGER COUNTING
SHOE brand Kurt Geiger is striding ahead of rivals as its successful US expansion powers it to record sales.
The British business said North America is now its biggest market after a 100-fold increase in sales over five years to £255million.
Overall group sales rose by 10 per cent to a record £115.6million last year, while earnings rose by a third to £40million.
Boss Neil Clifford said this year is “on track to smash all of our most ambitious predictions”.
He said: “Not bad for an independent British brand.”
CRAFTY SELL-OFF
ARTS and craft chain Hobbycraft is changing hands after 14 years’ ownership by private equity firm Bridgepoint.
Bridgepoint, which also owns cafe brand Pret, bought the business in 2010 and has now sold it to Modella Capital — an investment boutique — for an undisclosed sum.
The craft retailer employs 2,000 people and last year made £216million in sales.
Modella boss Joseph Price said the firm is planning to invest in bricks and mortar stores and its online business.
Two-year high
THE pound has hit a two-year high against the dollar as markets bet on the timing of interest rate cuts.
Sterling hit $1.32 yesterday, the highest since March 2022.
Traders think the US will be more aggressive in lowering rates than the Bank of England.
KLARNA’S SHIFT TO A.I. STAFF
ARTIFICIAL intelligence is already replacing jobs at “buy now pay later” firm Klarna.
It revealed yesterday that an AI assistant was doing the work of 700 employees and boosted revenue per worker by 73 per cent to £518,000.
The 24-hour bot can chat to customers in 35 languages and has sped up response times from 11 minutes to two minutes.
Klarna also uses AI to generate legal documents and marketing campaigns faster.
Boss Sebastian Siemiat- kowski said Klarna had used AI efficiencies to shrink its workforce from 5,000 employees to 3,800 by not replacing workers.
But he warned regulators about “how profoundly AI can impact society”, adding: “I urge everyone including policymakers to approach this change with careful, informed and steady stewardship.”
Lower staffing costs helped Klarna narrow its losses to £24million from £155million.
SO BERRY UN-CHIC
BURBERRY has committed yet another fashion faux pas by dropping out of the FTSE 100.
The troubled brand will be demoted to the FTSE 250 after losing half of its value this year.
The development will pose another headache for new boss Joshua Schulman, as the firm will now lose out on investment from some of Britain’s biggest pension tracker funds.
Its shares fell by 3 per cent yesterday to 692p, with the firm valued at £2.48billion.