Equal pay and time limits
On 24 October 2012, the Supreme Court handed down its Judgment in this long running case. It held that employees who fail to present their equal pay claims to an Employment Tribunal within the strict six month time limit after their claim arose or from termination of their employment can instead bring their claims as breach of contract claims in the civil courts, where there is a five year time limit in Scotland and a six year limit in England & Wales.
174 Claimants alleged that Birmingham City Council had breached the Equal Pay Act 1970 (now part of the Equality Act 2010) by failing to pay them equal pay for undertaking work that had been rated as equivalent to their comparators’. They brought their claims in the High Court because they were well outside the six months time limit for bringing their claims in the Employment Tribunal.
Birmingham City Council argued that the claims should be struck out. It relied upon a clause of the Equal Pay Act, which allows an equal pay claim presented to the civil courts to be struck out in circumstances where the Court considers it could “more conveniently be disposed of separately by an Employment Tribunal”.
The majority in the Supreme Court held that the convenience test was not met. It held that it cannot be more convenient for a claim to be disposed of in a forum in which at the outset, and without reference to the merits of the case, it would be dismissed because of time bar. It considered that as Parliament had enacted concurrent jurisdictions to deal with breaches of the contractual equality clause, it must have envisaged circumstances where a claim for equal pay would be brought in the civil courts, relying upon the more generous time limits. However, the majority decision also suggested that Parliament should consider amending the Equality Act so that the usual six months time limit to present a claim to the Employment Tribunal is relaxed in cases where a claim regarding the operation of the equality clause has been brought in time before a Civil Court.
In the minority judgment, it was argued that a dismissal for failing to present a claim in time is a legitimate “disposal” for the purposes of the convenience test and that the question of convenience is really a question of what is the most appropriate forum. It argued that allowing the claims to continue in the High Court would frustrate the policy underlying the limitation provisions of the Equal Pay Act, which is meant to confer a degree of protection on employers. The minority considered that the majority Judgment would expose employers to stale claims and additional costs associated with defending cases in civil courts, and would effectively deprive employers of the content of the time bar defence.
This Judgment means that employees or ex-employees who are unable to bring equal pay claims in the Employment Tribunal may now bring their claims in the civil courts (Sheriff Court in Scotland or High Court in England and Wales). This may be particularly problematic for Local Authority and NHS employers who have already dealt with a huge number of equal pay claims in the Employment Tribunal. Such claims will bring with them the higher costs associated with defending litigation in the civil courts, although the Supreme Court suggested that where an individual should reasonably have presented their claim in time to the Employment Tribunal, this should be taken into account when awarding costs.