Next equal pay dispute demonstrates ‘material risk’ for investors

Investment commentators have welcomed the employment tribunal decision that ruled over 3,500 shop workers at British retailer Next ­– the majority of which are women – were not paid fairly after a six-year legal battle. 

The tribunal found on Tuesday (27 August) found Next had failed to show that paying its sales consultants, overwhelmingly women working in stores, lower pay rates than its warehouse workers was not sex discrimination. The retailer could have afforded to pay a higher rate but chose not to for purely financial reasons, said the claimants’ representation. 

Bev Shah, co-CEO at City Hive, commented this is an issue for investors: “Professional investors with influence in the boardroom, regardless of being passive or active, should be monitoring that labour laws are complied with, that workers are treated fairly, and should be also ensuring the business is accountable for the right costs of doing business.

“Investors need to know the right questions to ask to understand the nuances of social issues. Otherwise, they are failing to analyse these sufficiently.”

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