Next has been accused of destroying vital documents needed by shop-floor workers to prove their equal pay claim.
Hundreds of store staff, mostly women, have brought a claim against the retailer, arguing that their work is of equal value to that that carried out by colleagues in warehouses, who are mostly men.
Next pays warehouse workers between £2 and £6 an hour more than shop floor workers.
Law firm Leigh Day, which is bringing the case, alleges that timesheets showing what hours staff worked have been destroyed, a claim which Next strongly denies.
An Employment Tribunal hearing is scheduled for 12 January to establish what happened to the documents and what, if any, penalty Next should face.
The tribunal could choose to issue a strike-out order, meaning the retailer would lose the right to continue to defend the equal pay claims lodged before the hearing, Leigh Day said.
More than 330 of Next's 25,000 staff have lodged claims so far. The law firm estimates that if all eligible employees joined and the legal actio was successful, the retailer could have to pay out as much as £200m.
A spokesperson for Next said: “Next has not destroyed documents in breach of a Tribunal Order and it believes that any assertion that it has, is based upon inaccurate information.
Next is therefore confident that any application for a ‘Strike-Out-Order’ will not succeed, as it is meeting all of its obligations under the Tribunal process."
The company will continue to defend itself vigorously in the claim, the spokesperson said.
Elizabeth George, a barrister in the employment team at Leigh Day, said: “It appears that essential documents to our case have been destroyed. Next will have a full opportunity to explain how and why that was allowed to happen at the hearing in January and it would be wrong to pre-empt the Tribunal’s ruling on that.
“I can say that it is fundamental to a fair hearing of this case that neither side destroy documents that they know, or should know, are highly relevant to the other’s case."
Pauline Costello, whose name has been changed to protect her identity, has worked at a Next for more than 10 years.
She said she felt shocked and undervalued when she found out how much higher warehouse pay was.
“I’m hopeful for a positive outcome at the hearing," Ms Costello said. "It will help to restore my confidence and self-respect because finally the company I have worked hard for will now recognise that my role as a sales consultant is as valuable as a warehouse operative.”
The claim is one of a series brought against large UK retailers for billions of pounds over years of pay discrepancies between jobs filled mostly by men and those filled mostly by women.
Claimants must prove that their work is of equal value and that the difference in pay cannot be justified. This can be complex for the tribunal to assess, with experts brought in to review what different workers do and give their role a “job score”.
If successful, claimants may be able to claim up to six years of back pay to compensate them for the shortfall.