Earlier this week the Supreme Court handed down what has been
claimed as a 'landmark' decision in relation to equal pay
claims. The Court's decision allows an equal pay claim to be
brought in the civil courts as breach of contract (for which the
time limit is six years) after the employment tribunal time-limit
of 6 months has passed. As a result, the Court permitted 174 equal
pay claims against Birmingham City Council to proceed as breach of
contract claims in the civil court system.
It is well established that there is concurrent jurisdiction in the
tribunal and court for equal pay claims, but that in practice
claims are heard in employment tribunals which have greater
expertise in their determination, involve less cost and a faster
resolution. Further, where a case is brought in the civil system,
the court has a discretion to strike out equal pay claims if the
claims could be "more conveniently dealt with"
by a tribunal. However, in the case of Birmingham City Council
v Abdulla, the Supreme Court concluded that equal pay claims
can never be more conveniently disposed of by an employment
tribunal if they would then be time barred because the six month
time limitation period had elapsed. Unusually for discrimination
type cases, equal pay is not a claim where the time limit is
extendable – almost every other type of discrimination based
claim permits the employment tribunal to extend the time limit, for
example if it is just and equitable to do so. However, the Supreme
Court noted that Parliament might well wish to consider introducing
a relaxation of the usual limitation period for the presentation of
a claim to an employment tribunal in cases in which an equal pay
claim has been brought in time before a civil court and, were it
not for the effect of the usual limitation period, would more
conveniently be disposed of by the employment tribunal.
Aside from now leaving employers open to the threat of equal pay
claims long after the employment relationship has come to the end,
this case is interesting in the general context of the development
of the law on equal pay. The law on equal pay has remained
fundamentally unchanged since its introduction in 1970 and was not
the subject of any major change as a result of the Equality Act
2010, although the Act did outlaw pay secrecy clauses in an effort
to increase transparency on pay issues. The initial plans for the
Act also included provisions on compulsory pay audits but these
were eventually dropped and current proposals under the Enterprise
and Regulatory Reform Bill are for employment tribunals to be able
to order equal pay audits only where an employer loses an equal pay
claim, subject to certain exceptions. These limited changes to
equal pay laws are in line with the Government's professed
intention to not increase the level of regulation on business and
so to encourage economic growth. Despite allowing employees longer
to bring claims, this latest ruling by the Supreme Court does
nothing to directly oppose this approach by Government.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 26/10/2012.