The case involves 174 former employees of Birmingham City Council (all women bar four) who brought equal pay claims in the civil courts. They claimed that they were employed to carry out work rated as equivalent to male colleagues, but did not receive the substantial bonuses and additional payments to which their male colleagues were contractually entitled.
The issue for the Supreme Court was whether it should strike out the equal pay claims on the ground that they could more conveniently be disposed of in the Employment Tribunal. If they were struck out on that basis, the claimants would have no recourse through the Tribunal, as their claims were filed beyond the strict six month time limit so would also be struck out by the Tribunal.
The Supreme Court recognised that claimants had the option to claim in the Tribunal or the Courts but that usually it was more convenient for the claims to be dealt with in the Tribunals. However, the majority ruled that it would never be more convenient for the Tribunal to dispose of such claims where they would be out of time in the Tribunal also. The Supreme Court therefore dismissed the Council's appeal. Importantly, they said it was not necessary for the claimants to explain why they had failed to bring an equal pay claim in the Tribunal in time since the Council was not alleging abuse of process by the claimants.
The critical balance - more time but at what cost?
On the face of it, the Abdulla decision appears to open up the possibility of an equal pay claim to a much wider group of potential litigants. But, do employers really need to brace themselves against a flood of civil court litigation?
In reality, the Employment Tribunal is likely to continue to be the usual forum of choice for most claimants. The stakes for individuals pursuing claims in the civil courts are higher, with the potential for significant costs awards to be made against the losing party, unlike the Tribunal, where costs awards are still relatively rare. However, the reverse is also true, with much larger costs awards available to successful claimants against their ex-employers.
It's also very much in the interests of claimants to act quickly as the speed in which they bring proceedings has a direct impact on the level of any compensation that might be recoverable. Despite a longer limitation period in the civil courts, the period of back pay is still limited to loss suffered within the six years before the date of claim, plus any loss after the claim was lodged. This means that a claim brought three years after an individual leaves employment is potentially worth half as much as it might have been if it was brought earlier. In the public sector at least, unions and lawyers have been alive to the issues for a number of years and will often have taken steps to protect the position of leavers by lodging tribunal claims at the time.
New hunting ground for no win no fee lawyers?
With many of the larger equal pay claims against the NHS and local authorities settling or reaching hearing after many years and the unions shifting their focus from equal pay claims to the weighty issue of pensions, could the private sector provide the new hunting ground for no win no fee lawyers?
There is evidence that the economic crisis has hit women hardest. Many job cuts are to female dominated roles, and many new jobs created are part time. At the same time, the considerable gender pay gap rightly continues to receive attention, with the EU and the UK Government also grappling with the best way to improve the gender balance on boards and in senior management roles.
Against this back-drop, there may well be attempts to exploit the outcome in the Abdulla case by actively pursuing litigation in other sectors. No win no fee lawyers may be attracted to the potential rewards of group actions, particularly in sectors such as financial services where the level of the gender pay gap is well publicised. Meanwhile, potential claimants who may have been uncertain about rushing to file a claim in the Tribunal will have more time to reflect on their position before deciding to bring a claim in the High Court.
Practical advice for employers
Evidence shows that a proactive and transparent approach to equality of pay benefits both employers and employees. Taking positive steps to identify and address any perceived inequalities, without unwittingly opening themselves up to future litigation, should therefore be a priority for all employers.
If the worse comes to the worst and you are compromising employment and / or equal pay claims, remember to compromise not only actions in the Tribunal, but also the civil courts