Opinion of Advocate General Leger in Belinda S Levez v TH Jennings (Harlow Pools) Limited Case C/326/96)
Advocate General Leger has cast further doubt on the validity of the two year limit on back pay recoverable by a worker in an equal pay case under Section 2 (5) of the Equal Pay Act 1970. If followed by the European Court of Justice, the opinion will affect all equal pay cases where the amount of back pay claimed is in respect of a period greater than two years before the presentation of the Industrial Tribunal complaint, and in particular, the many thousands of claims lodged by part-timers in relation to their denial of access to membership of pension schemes.
Mrs Levez started working for TH Jennings in February 1991 as a manager of a betting shop. When she left, in March 1993, she discovered that, contrary to what her employer had previously told her, she had, up until 1992, been paid less than her male predecessor doing the same job.
She applied to the Industrial Tribunal seeking equal pay for work of equal value in September 1993. Her claim was upheld. However, because of Section 2 (5) of the Equal Pay Act 1970, her compensation was limited to salary in respect of the period going back to September 1991, and not the date she started employment. She appealed, arguing that the two year limit on back pay should be overturned as being in contravention of European Law.
It is up to individual member states to decide upon the procedural limitations in domestic legislation giving effect to rights derived from European Law. However, there are two provisos. First, any procedural limitations must be no less favourable than the procedural limitations governing similar actions under domestic law (the so called 'principle of equivalence'). Secondly, the procedural requirements must not make it virtually impossible, or excessively difficult, for workers to exercise their rights conferred by European Law ('the principle of effectiveness').
Advocate General Leger concludes that the remedy sought is a claim for back pay and that the appropriate domestic claims for the purposes of comparison are claims where back pay is sought. He does not go on to say which type of claim is the appropriate comparator.
This leaves a number of possibilities. In an ordinary claim for breach of contract, the limit is six years. However, in a claim for arrears of salary arising out of discrimination in pay on account of race, there would be no limit on the extent of back pay available.
Likewise, there would be no limit on a claim for back pay under the Disability Discrimination Act 1995 or in a claim for containing unlawful deductions from wages under the Employment Rights Act 1996.
The Advocate General was particularly concerned that, although the six month time limit for presentation of a claim from the date of termination of employment appears to be more favourable than, say, the time limit for a claim relating to unlawful deductions from wages, there is no discretion to extend that time limit. The Advocate General concludes that, taking the two year back pay limit and the lack of a discretion to extend the time limit for bringing the claim together, the principle of 'equivalence' is breached.
In relation to the 'effectiveness principle', Advocate General Leger finds that, at first sight, there is no objection to the setting of a reasonable limit on the period in respect of which arrears may be claimed. However, he places great weight on the fact that Mrs Levez was effectively deceived by her employer in not being told of the rate of pay of her predecessor. The objective of providing legal certainty could not therefore justify the two year limit in Mrs Levez' case. He concludes that, as there is no power to extend that limit, the two year limit will make it virtually impossible or excessively difficult to enforce European Law rights.
Although the Advocate General does not go so far as to condemn outright the two year limit on back pay contained in Section 2 (5) of the Act, he casts serious doubts as to whether the limit should be applied by Courts in the UK.
Where equal pay case negotiations are currently taking place, we recommend that the vulnerability of the two year limit be taken into account and used to increase amounts of back pay to workers.