Next has won a victory for common sense on pay

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A rare glimmer of sanity as Reuters reports that the British clothing retailer Next ‘has won an appeal allowing it to keep paying ​warehouse workers more than sales consultants’. The report adds that:

The ​ruling on basic pay overturns a key part of a 2024 Employment Tribunal decision ‌in ⁠favour of over 3,500 current and former predominantly women shop workers, who argued they were paid less than warehouse operatives for work of equal value.

Simply because more women tend to do certain jobs and more men do others is not in itself evidence of discrimination. It could just be evidence of choices being exercised. For instance, around 95% of taxi drivers are men. So what? Does it prove some kind of misogynist closed shop? No. The few women taxi drivers I have encountered have been cheerful enough, had plenty of work and had a meter ticking away at the same pace as for their male colleagues. Of course, a taxi firm is legally obliged to provide equal pay to men and women for the same work. But I suspect that if left purely to the market, the boss seeking to maximise profit would pay them the same rate anyway.

By contrast, three quarters of the workforce in Britain’s libraries are women. Not quite sure why, but I don’t suppose it’s prejudice against men.

A quick look at recruitment agencies’ advertising suggests librarians generally earn more than taxi drivers. Perhaps around £32,000 a year compared to £28,000 a year. I suppose taxi drivers get better tips. There we are. I see no evidence that women taxi drivers or male librarians are being hard done by.

If the conclusion that’s taken is that taxi drivers and librarians must be paid the same, in the interests of sexual equality, that strikes me as absurd. But so is the comparison between working in a shop and a warehouse. The only difference is that it’s unlikely the same employer would have taxi drivers and librarians on its books.

Yet it’s not only Next that has been in the litigation firing line. Tesco, Sainsbury’s, Asda and Morrisons all have expensive legal cases grinding slowly along.

‘Comparing check-out work with distribution centre work to me feels like chalk and cheese,’ Clive Black, an analyst at investment bank Shore Capital, told The Times. ‘That’s not to denigrate the in-store operatives, but working in a distribution centre is much more manual, different hours and frankly isn’t as pleasant as working in a shop.’

The latest development wasn’t a complete victory for Next. There were some points on night-time premiums, overtime premiums and paid rest breaks where the Tribunal’s decisions were upheld. The lawyers can look forward to further lucrative work with further appeals.

But the real culprits are not the lawyers but the legislators, the politicians, for passing bad law in the first place and then failing to repeal it. Equalities legislation interprets ‘equal work’ to mean work ‘rated as equivalent’ or of ‘equal value’. That allows plenty of latitude to make mischief.

There have already been consequences in Birmingham City Council. That local authority is a financial disaster zone. Beset by profligacy and mismanagement, the dustbins have not been emptied while the council tax increases along with the debt burden. Much of this is the council’s own fault. But the worst blow was inflicted on it by the courts. This is not about the principle of equal pay, meaning that men and women should get the same for the same job. Instead, the principle of ‘equal value pay’ contorts that principle to say that different jobs that are judged to be equivalent should get the same pay – and a discrimination suit can be brought if one is male-dominated – such as dustmen and road sweepers – and another female-dominated – such as cleaners or care workers. That 2012 Supreme Court ruling left the Council with a £1.1 billion bill for compensation.

What disastrous arrogance it all is. Such is the disdain for the market that bureaucrats and lawyers take it upon themselves to decide that one job requires an equal level of skill and responsibility as another, quite different one, and so should be paid the same. Completely arbitrary decisions divorced from economic reality.

Despite Brexit, the European Union still has some responsibility. Its various equal pay directives require that employers must pay workers equally for different jobs determined to be of ‘equal value’. But in 2023, the BBC reported on a ‘Tory U-turn’ that meant this would remain in UK law. The EU can no longer be blamed if we continue to be so feeble as to bow to such folly.

Employers, in the private sector and the public sector, have to set pay to attract the workforce they need. They should be allowed to get on with managing the process, confident that the law will operate in a reasonable and common sense way. While the victory for Next this week is welcome, it would be a stretch to suggest that confidence exists at present.

Who knows what interpretation will be applied at the next tribunal or the resulting appeal. We could just cross our fingers and hope they will be sensible. But better would be to elect some politicians with the courage to repeal this nonsense.

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