Earlier this week the Supreme Court handed down what has been claimed as a ‘landmark’ decision in relation to equal pay claims. The Court’s decision allows an equal pay claim to be brought in the civil courts as breach of contract (for which the time limit is six years) after the employment tribunal time-limit of 6 months has passed. As a result, the Court permitted 174 equal pay claims against Birmingham City Council to proceed as breach of contract claims in the civil court system.
It is well established that there is concurrent jurisdiction in the tribunal and court for equal pay claims, but that in practice claims are heard in employment tribunals which have greater expertise in their determination, involve less cost and a faster resolution. Further, where a case is brought in the civil system, the court has a discretion to strike out equal pay claims if the claims could be “more conveniently dealt with” by a tribunal. However, in the case of Birmingham City Council v Abdulla, the Supreme Court concluded that equal pay claims can never be more conveniently disposed of by an employment tribunal if they would then be time barred because the six month time limitation period had elapsed. Unusually for discrimination type cases, equal pay is not a claim where the time limit is extendable – almost every other type of discrimination based claim permits the employment tribunal to extend the time limit, for example if it is just and equitable to do so. However, the Supreme Court noted that Parliament might well wish to consider introducing a relaxation of the usual limitation period for the presentation of a claim to an employment tribunal in cases in which an equal pay claim has been brought in time before a civil court and, were it not for the effect of the usual limitation period, would more conveniently be disposed of by the employment tribunal.
Aside from now leaving employers open to the threat of equal pay claims long after the employment relationship has come to the end, this case is interesting in the general context of the development of the law on equal pay. The law on equal pay has remained fundamentally unchanged since its introduction in 1970 and was not the subject of any major change as a result of the Equality Act 2010, although the Act did outlaw pay secrecy clauses in an effort to increase transparency on pay issues. The initial plans for the Act also included provisions on compulsory pay audits but these were eventually dropped and current proposals under the Enterprise and Regulatory Reform Bill are for employment tribunals to be able to order equal pay audits only where an employer loses an equal pay claim, subject to certain exceptions. These limited changes to equal pay laws are in line with the Government’s professed intention to not increase the level of regulation on business and so to encourage economic growth. Despite allowing employees longer to bring claims, this latest ruling by the Supreme Court does nothing to directly oppose this approach by Government.