Equal pay cases rarely arrive with fireworks. They tend to come wrapped in spreadsheets, job descriptions and long arguments about “material factors”. But every so often, a judgment cuts through the technicalities and shows us something important about how employers justify pay gaps — and how the law responds.
The Next Retail Ltd & Next Distribution Ltd v Thandi & Others appeal is one of those cases. It centres on a familiar divide: retail staff on one side, warehouse staff on the other, and a pay gap running straight down the middle. The workers argued the gap was discriminatory. The employer said it was simply the labour market at work.
The Employment Tribunal initially sided with the workers on key points. The Employment Appeal Tribunal (EAT) then stepped in and corrected parts of that reasoning. The result is a judgment that matters not just for the claimants, but for anyone fighting pay inequality in sectors where employers lean heavily on “market forces” to explain why some jobs are valued more than others.
Retail vs warehouse: the pay gap at the heart of the case
The claimants were retail workers. Their comparators were warehouse workers. Warehouse staff were paid more — not just in basic pay, but in some additional benefits too.
The tribunal accepted that the retail workers had shown particular disadvantage, based on statistical differences between the two groups and other factual findings. That’s significant. Equal pay claims often fall at the first hurdle because tribunals decide the disadvantage isn’t proven. Here, the tribunal said it was.
But when it came to the employer’s defence — the “material factor” argument — the tribunal rejected Next’s justification. It said the employer hadn’t shown a legitimate aim for the pay difference.
That’s where the EAT disagreed.
The EAT’s intervention: legitimate aims and proportionality
Mr Justice Bourne upheld the tribunal’s finding on disadvantage, but overturned its conclusion on justification. He said the tribunal had misunderstood the employer’s aim.
Next’s aim, taken as a whole, was to pay higher rates to warehouse staff because those roles faced recruitment and retention pressures that retail roles did not. That, the EAT said, is a legitimate aim. And crucially, the employer did not need to justify why it didn’t raise retail pay to match warehouse pay. The only question was whether the higher warehouse pay was justified.
Because the tribunal had approached the question the wrong way round, its alternative finding — that the employer’s justification wasn’t proportionate — also collapsed. The tribunal had focused too much on why retail pay was lower, and not enough on why warehouse pay was higher. That’s a legal misstep, and the EAT corrected it.
On other pay benefits, the tribunal’s reasoning was sound. No error there.
The cross‑appeal: direct discrimination
The workers also argued direct discrimination. The tribunal rejected that claim, and the EAT agreed.
Two points stand out:
- Market forces don’t automatically amount to discrimination. Employers don’t have to prove that market pressures affect men and women equally every time they rely on them.
- You don’t need a Board member to give evidence for the employer’s reasoning to stand. The tribunal had enough evidence to understand why Next made its decisions, even without senior executives giving live testimony.
That’s a tough outcome for claimants. It shows how high the bar remains for proving direct discrimination in pay cases.
What this means for workers and unions
Market‑forces arguments are here to stay
Employers will continue to rely on recruitment and retention pressures to justify pay gaps. This judgment strengthens that defence. It doesn’t make equal pay claims impossible, but it does make them harder when employers can point to external labour‑market conditions.
Tribunals must ask the right question
The tribunal focused on the retail workers’ lower pay. The EAT says the real question is: Was the higher warehouse pay justified? That framing matters. It shifts the burden and can change the outcome.
Statistical disadvantage still matters
The EAT upheld the tribunal’s finding that the claimants had shown disadvantage. That’s important. Workers can still use statistical evidence to demonstrate inequality — and tribunals must take it seriously.
Direct discrimination remains a steep climb
Unless there’s clear evidence of sex‑based decision‑making, tribunals will usually accept business‑related explanations.
The wider lesson
This case shows the limits of equal‑pay law when employers can point to market conditions. It also shows how easily tribunals can misapply the legal tests — and how important it is for workers to have strong representation capable of challenging those errors.
For unions, the message is clear: You need robust evidence, clear statistical analysis and a strong alternative narrative if you want to challenge market‑forces defences.
For workers, it’s another reminder that fairness and legality are not always the same thing. A pay gap can feel unjust, and still be legally justified.
The fight for equal pay continues — but cases like Thandi show exactly where the pressure points are, and why collective action remains essential.
By Pat Harrington
This article is intended as a general explanation of the decision in Next v. Thandi. It is not legal advice and should not be relied upon as such. The summary is based on publicly available information, including the judgment and reporting from reputable news sources, and is provided for information and comment only. Individual cases turn on their own facts, and anyone affected by issues raised here should seek advice from a qualified legal professional. Solidarity Trade Union accepts no liability for any loss arising from reliance on this material.
