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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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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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