A major equal pay case involving Next has taken an important turn after the Employment Appeal Tribunal allowed part of the retailer’s appeal over differences in pay between predominantly female shop workers and predominantly male warehouse workers.
The judgment, handed down on 7 September 2026, concerns thousands of workers and has attracted significant attention because it looks at a question many employees and employers may assume is straightforward:
If two jobs are of equal value, must the employees always receive the same basic pay?
The answer is more complicated than it may first appear.
What happened in the Next case?
Thousands of Next shop workers brought equal pay claims arguing that they should receive the same basic hourly pay as warehouse workers carrying out work of equal value.
An earlier Employment Tribunal decision had found in favour of the shop workers on basic pay, potentially exposing Next to more than £30 million in back pay.
Next appealed that part of the decision.
The Employment Appeal Tribunal has now found that the difference in basic pay could be objectively justified by market factors, including recruitment and retention pressures affecting warehouse roles.
However, this does not bring the entire case to an end.
Findings relating to matters including overtime, night premiums and paid rest breaks remain in favour of the shop workers, and further appeals are expected.
Does this mean employers can simply pay men and women differently?
No.
That would be a significant misunderstanding of the judgment.
Equal pay law remains designed to prevent unlawful differences in contractual pay and benefits between men and women carrying out equal work.
Where there is a difference in pay, an employer may be able to defend that difference by showing that it is caused by a genuine material factor that is not sex discrimination.
Where that factor has an indirectly discriminatory effect, the employer may also need to show that the difference can be objectively justified.
The Employment Appeal Tribunal’s decision in the Next case demonstrates that market forces can, in some circumstances, form part of that justification.
But these cases are highly fact specific.
An employer cannot simply state that a particular role commands a higher market rate and assume that will automatically defeat an equal pay claim.
What does this mean for employees?
Employees who believe they are being paid less than colleagues carrying out equal work should not assume that a pay difference is necessarily lawful.
The reasons behind that difference matter.
Questions may include:
- Are the roles genuinely of equal value?
- What explanation has the employer given for the difference in pay?
- Is that explanation supported by evidence?
- Does the difference disproportionately disadvantage one sex?
- Can the employer objectively justify the arrangement?
The Next judgment also shows that an equal pay dispute can involve different components of remuneration.
Basic pay may be treated differently from matters such as overtime premiums, night working payments or paid breaks.
If you are concerned about unequal pay, early advice can help establish whether there may be grounds to challenge the position.
What does this mean for employers?
For employers, the judgment is an important reminder that pay decisions should have a clear and properly evidenced rationale.
Where different groups of workers receive different rates of pay, businesses should be able to explain why.
That can include reviewing:
- recruitment pressures
- staff retention difficulties
- local or sector market rates
- job evaluation processes
- overtime arrangements
- bonuses and premiums
- pay progression
- historic pay structures
It is also important to consider whether apparently neutral pay practices have a disproportionate impact on men or women.
The stronger the evidence behind a pay decision, the easier it will be to explain and defend if challenged.
Why the case matters
This is an important judgment because it illustrates the difference between equal value and automatic identical pay.
It also highlights how complex equal pay disputes can become when market conditions, recruitment pressures and indirect discrimination arguments overlap.
For employees, it reinforces the importance of understanding why a difference in pay exists.
For employers, it demonstrates why pay structures should not simply evolve without review.
A difference which may appear commercially understandable can still raise legal issues if the reasoning has not been properly considered or documented.
Equal pay disputes are rarely straightforward
The Next case is significant, but it should not be treated as a blanket rule for every workplace.
The Employment Appeal Tribunal itself was considering the particular facts and evidence in this case.
Further appeals are also expected, meaning the legal position may continue to develop.
Employers and employees should therefore avoid drawing conclusions from headlines alone.
Need advice on equal pay or employment rights?
KMC Legal & Finance advises both employees and employers on employment law matters, including:
equal pay, discrimination, workplace disputes, employment contracts, policies and Employment Tribunal claims.
If you are concerned about your pay arrangements, believe you are being treated unfairly at work, or need advice about the structure of your organisation’s pay practices, our team can help you understand your position.
KMC Legal & Finance
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