Equal pay time
Labour & European Law Review Weekly Issue 299 13 December 2012
Under the Equality Act 2010 both employment tribunals and courts can decide equal pay claims because they are essentially claims for breach of contract. In Abdulla and ors v Birmingham City Council, the Supreme Court said that employees had the right to bring equal pay claims in a court that would be out of time in a tribunal.
In April 2010 claimants supported by their trade union defeated the Council’s material factor defence in their employment tribunal equal pay claims. In June 2010 174 claimants brought equal pay claims in the High Court on the same basis.. All the claimants had stopped working for the Council at various times between August 2004 and November 2008 and so were out of time for bringing their claim in a tribunal.
Relying on section 2(3) of the Equal Pay Act 1970 (now section 128 of the Equality Act), the Council applied to the court to strike out the claims, on the basis that it had no jurisdiction to hear statutory equal pay claims. Alternatively, it argued that the court could not hear the cases because they could be disposed of “more conveniently” in a tribunal.
Section 2(3) states that where it appears to the court that an equal pay claim could be disposed of “more conveniently” by a tribunal, the court can strike out the claim to the court or can stay the claim and refer it back to the tribunal. The other option is that the court can hear the claim.
The qualifying date for bringing an equal pay claim in a tribunal is six months after the last day of any contract of employment. The limitation date for a breach of contract claim is six years from the last day that any inequality in pay occurred in a particular contract. Arrears of pay cannot be awarded by a court for any date earlier than six years before the claim is made.
Decisions of lower courts
Noting that Parliament had not specified that all equal pay claims had to be dealt with by tribunals, the High Court said that it must therefore be “open to a claimant not to pursue that option and instead to commence Court proceedings”.
If a claimant did so, it was for the court to decide whether it would be more “convenient” for the claim to be disposed of by a tribunal. As this would include deciding the merits of the case, it was unlikely to be more “convenient” if the case would be struck out for being out of time. The Court of Appeal agreed.
The Council appealed again, arguing that the six-month time limit for tribunal claims was redundant if claimants could have their cases heard in another court and that the claims should be struck out, unless claimants could provide a good reason for the delay.
Supreme Court decision
The majority of the Supreme Court disagreed, saying that the Council’s argument amounted to a re-write of section 2(3) by shortening the limitation period allowed by Parliament for bringing claims in court.
Noting that the statutory objective of the section was the “distribution of judicial business for resolution in the forum more fitted for it”, the Court acknowledged that it would usually be more convenient for a tribunal (as opposed to a court) to hear an equal pay claim. But if a claimant did not lodge their complaint in time, a tribunal could not be more convenient and the reason for the failure to do so was not relevant “to the notion of convenience”.
However, the majority of the Supreme Court warned claimants who did not lodge their claims in time that the failure might be a factor influencing the order the court made as to costs.
This decision is only about the powers of courts and tribunals to hear cases. The claimants have not yet won their cases. They will probably seek to benefit from the work done by the unions as otherwise they will have to prove their cases in the court. The warning the Supreme Court have given about costs is a serious one. Access to justice in the courts is not cheap. There is no free ACAS appointed independent expert in the High Court. In general it will be more sensible and cost effective to make the claim in the a tribunal, even when fees are introduced next year.