Employment tribunal and court judgments | September 2026

This long-running equal pay claim was brought by more than 3,500 predominantly female retail employees of Next, who argued that their work was of equal value to that performed by predominantly male warehouse operatives but that they were paid less. The claim challenged a range of contractual terms, including basic pay and bonuses.

In 2024, the Employment Tribunal (ET) found that the retail and warehouse roles were of equal value and concluded that Next could not justify several of the pay differences. In relation to basic pay, the Tribunal held that Next’s reliance on market forces amounted primarily to an argument based on cost and therefore did not provide a sufficient justification for the disparity.

Next appealed the decision, while the claimants cross-appealed on certain issues, including whether the pay differences amounted to direct sex discrimination.

The Employment Appeal Tribunal (EAT) allowed Next’s appeal in relation to basic pay and certain other benefits. The EAT found that the Tribunal had erred in law when assessing Next’s material factor defence and overturned the ET’s findings that Next had breached equal pay legislation.

The EAT accepted that the pay differential arose from legitimate recruitment and retention challenges in the warehouse workforce. The evidence showed that Next paid higher rates to warehouse employees because it needed to attract and retain sufficient staff in a competitive labour market, and these pressures did not apply to retail roles in the same way. This amounted to a legitimate aim capable of justifying the pay difference.

The EAT also held that the Tribunal had approached the proportionality assessment incorrectly. Rather than focusing on why retail staff had not received higher pay, the correct question was whether paying warehouse staff more was a proportionate means of achieving the legitimate aim of recruitment and retention.

Importantly, however, the EAT upheld the Tribunal’s finding that the claimants had established a group disadvantage for women and rejected the claimants’ argument that the case involved direct sex discrimination. The EAT confirmed that an employer’s reliance on market forces does not automatically amount to direct sex discrimination.

The case highlights the importance of retaining evidence explaining and justifying pay decisions, particularly where different parts of a workforce are paid at different rates because of recruitment and retention pressures.

Employers can, in principle, rely on labour market pressures, recruitment difficulties and retention requirements as a valid defence in equal pay claims where those factors are genuine and supported by evidence.

However, employers must be able to demonstrate that the pay differential pursues a legitimate aim and is a proportionate way of achieving that aim. A bare assertion that “the market required it” is unlikely to be sufficient. For guidance on equal pay matters, please contact Kathryn Evens.

The Claimant, ABC, was a former patient at Huntercombe Hospital, a privately operated psychiatric facility. She alleged that during her stay at the hospital in 2018 and 2019 she was subjected to verbal and psychological abuse by staff and was physically restrained on numerous occasions.

The Claimant initially pursued her claim against Huntercombe. A TUPE transfer took place and Active Young People Limited (‘AYPL’) stepped into Huntercombe’s shoes. After discovering that Huntercombe had entered liquidation and that insurance arrangements might significantly limit any recovery, she amended her claim to include AYPL. Her argument was that Huntercombe’s vicarious liability for the acts of its employees had transferred to AYPL under Regulation 4(2)(a) TUPE.

The High Court rejected the argument and the Claimant appealed to the Court of Appeal (CoA).

The CoA unanimously dismissed the appeal and upheld the High Court’s decision, confirming that a transferor’s vicarious liability to third parties for employees’ pre-transfer wrongdoing does not transfer to a transferee under TUPE.

The CoA held the purpose of the legislation is to protect employees and preserve their employment rights when a business changes hands. It is not intended to provide additional rights or remedies to third-party claimants.

Although Regulation 4(2)(a) TUPE transfers rights, powers, duties and liabilities that arise “under or in connection with” employment contracts, the CoA concluded that a transferor’s vicarious liability to a third party does not fall within that category. Such liability is owed to the third party rather than the employee and is separate from the employee’s contractual rights and obligations.

The CoA also noted that TUPE contains detailed provisions dealing with employment-related liabilities and information-sharing obligations between transferor and transferee, but does not contain equivalent provisions relating to third-party claims.

The decision confirms that TUPE’s protection is principally concerned with employees’ rights and preserving employment rights on a transfer. It does not operate to transfer an employer’s vicarious liability to third parties for employees’ pre-transfer acts or omissions.

This decision also provides a welcome clarification that a business will not automatically inherit an employer’s vicarious liability to third-parties under TUPE.

Dr David Miller, a Professor of Political Sociology at the University of Bristol, was summarily dismissed on 1 October 2021 for gross misconduct following comments he made during February 2021 concerning Zionism and related political issues. He subsequently brought claims for:

• direct discrimination because of philosophical belief;
• harassment related to philosophical belief;
• unfair dismissal; and
• wrongful dismissal.

The Employment Tribunal (ET) found that Dr Miller’s anti-Zionist beliefs constituted protected philosophical beliefs and concluded that he had been dismissed because he had expressed those beliefs. The ET therefore held that his dismissal constituted direct discrimination on the grounds of religion and belief. It also found that the dismissal was both unfair and wrongful.

However, the ET reduced his unfair dismissal compensation by 50% for contributory fault and further concluded that there was a 30% chance he would have been fairly dismissed at a later date because of separate social media comments made in August 2023. It rejected his harassment claim and certain other discrimination allegations.

The University appealed the decision, which included arguing that the compensation awarded for the direct discrimination claim should be reduced by 100%.

The EAT dismissed the University’s appeal and held that Dr Miller’s anti-Zionist beliefs qualified as a philosophical belief under the Equality Act, citing that the comments concerning Dr Miller’s views on Zionism had a material impact on the decision to dismiss and as a result, his dismissal was because of the manifestation of his beliefs.

The EAT rejected the University’s arguments that Dr Miller’s beliefs were opinions and political.

The EAT upheld the ET’s decision to reduce the unfair dismissal basic and compensatory awards by 50% for contributory fault. However, it rejected the University’s argument that compensation should have been reduced by 100%.

Further, the EAT concluded that the Tribunal had not adequately explained its assessment that there was a 30% chance Dr Miller would have been fairly dismissed by October 2023, because of later social media posts. This aspect of the decision has been remitted back to the Tribunal for reconsideration. The EAT also dismissed Dr Miller’s cross-appeal, which challenged the rejection of his harassment claim and certain other findings.

The EAT’s decision confirms that beliefs that may be considered unpopular or offensive to others may still qualify as protected beliefs under the Equality Act. As such, employers should be alive to this possibility when managing belief issues in the workplace. Further, employers should seek to understand what an employee’s protected belief is, including what forms part of that belief and what is not a manifestation of the employee’s belief.

The case highlights the need for a careful and evidence-based approach before taking action to manage a workplace belief issue.