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Opening the flood-gates for old equal pay claims
22 December 2010
Broadly speaking, equal pay legislation means that men and women
must receive the same pay and conditions if they do:
- the same work
- work which has been ‘rated as equivalent’ by their
employer
- work of ‘equal value’
Until now, employees have always pursued equal pay claims in
employment tribunals. As a consequence, employment tribunals are
well versed in such claims. Employment judges hearing equal pay
claims receive specialist training and particular procedures have
developed for hearing ‘equal value’ claims, including the use of an
independent expert appointed by ACAS.
The time limit for presenting an equal pay claim to an
employment tribunal is, in the majority of cases, six months from
the end of employment. If inequality of pay is found, back-pay for
up to six years can be awarded.
The Abdulla case
In the recent case of Abdulla v Birmingham City
Council, 174 former employees consider that they have claims
in respect of bonuses paid to predominantly male groups in jobs the
employees say were rated as equivalent by the employer in
accordance with a Job Evaluation Scheme in the Blue Book
(collectively agreed terms and conditions for manual workers in
local authorities). They are all too late to bring a claim in the
employment tribunals, so have issued breach of contract claims in
the High Court where the time limit for bringing a claim is six
years from the date of the breach.
The Council applied to strike out the claims, inviting the Court
to exercise its discretion under s. 2(3) Equal Pay Act 1970, which
provides that where it appears to the Court that the claim “…
could more conveniently disposed of… by an employment tribunal the
court may direct that the claim… be struck out…”
The decision
Dismissing the Council’s application, Colin Edelman QC held that
the employees could bring their claims in the High Court. He
considered that “disposed of” meant determining the merits of a
particular case and so it could not be “more convenient” for a
claim to be disposed of by an employment tribunal, in circumstances
where the tribunal would simply strike it out for being out of
time.
The decision here is in direct contrast to a similar case
involving the same employer in which another judge held that the
claim should be struck out for this reason.
Potential implications for employers
Subject to the outcome of any appeal, it will now be possible
for employees to bring equal pay claims in the High Court within
six years of their final pay date.
It may also mean that an employee who had previously brought an
equal pay claim in the employment tribunal, but had it struck out
as being out of time, can now bring their claim in the High Court.
Such claims would be subject to a separate argument about whether
they had been ‘already judged’ and so could not be heard again in a
separate court. However, it is possible that a court would not
follow that argument, because it would put claimants who had taken
steps to bring a claim in a worse position than those who had
not.
In terms of the amount of any claim, back-pay can only be
claimed for six years from the date the claim is issued at court,
so the amount of compensation ought, theoretically, to be the same
as if the claim were brought in the employment tribunals.
If High Court equal pay claims are lost or settled by the
employer, they will certainly be more expensive than if they had
been brought in the employment tribunals. This is because, in High
Court litigation, the losing side generally has to pay the winner’s
legal fees. If the employee’s solicitors are acting on a
‘no-win-no-fee’ basis, then the losing side’s liability can also
include a ‘success fee’ of up to 100% of normal charges, and the
premiums for “after the event” legal expenses insurance. However,
the prospect of having to pay the employer’s legal costs may act as
a barrier to employees bringing claims with little prospect of
success.
As a practical point, if you receive a High Court or County
Court claim form, you should seek legal advice without delay,
because action is normally required within 14 days to protect your
position.
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statements of the law. It does not constitute legal advice and does
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