What: An Employment Appeal Tribunal ruled that Next was justified in paying warehouse workers more than mostly female shop-floor staff, overturning the most contested part of a 2024 equal pay decision.

Why it is important: The decision arrives as European employers prepare for the EU's pay transparency directive, adding a cross-border dimension to how retailers justify and disclose pay gaps.

The UK's Employment Appeal Tribunal has ruled that Next was justified in paying warehouse staff a higher hourly rate than shop-floor employees, annulling the most contentious element of a 2024 decision that had strengthened equal pay claims against major British retailers. Next, whose staff are predominantly female on the shop floor and more evenly split by gender in warehouses, had argued that higher warehouse pay was necessary to recruit and retain workers, even though the roles were assessed as being of equal value. The tribunal agreed, finding that recruitment and retention needs constituted a legitimate aim justifying the pay gap, and that Next was not required to raise shop-floor pay to match.

Next called the ruling a "landmark victory" that removes a threat to the viability of many of its stores. Leigh Day, representing thousands of current and former Next employees, called the outcome on basic pay "disappointing," while noting the tribunal upheld earlier findings against Next's practice of paying store staff less for night and Sunday shifts, overtime and rest breaks. Next plans to appeal those remaining findings. The ruling carries wider significance for pending claims against Tesco, Asda, Morrisons and Sainsbury's, with Tesco's potential liability estimated near £4bn.

IADS Notes: The ruling lands against a backdrop of intensifying wage pressure across UK retail, where major chains have already been raising shop-floor pay to compete for talent amid tighter labour markets and rising payroll costs (a Drapers report from April 2026 detailed a wave of increases at Selfridges, John Lewis, M&S, Tesco and Asda). That context sharpens the stakes of the tribunal's decision: having accepted "market forces" as a valid justification for paying warehouse staff more than shop workers, employers retain flexibility to set differentiated pay scales even as broader wage inflation continues to squeeze margins across the sector.

Next wins ‘landmark’ equal pay ruling in UK tribunal