The Supreme Court has confirmed that equal pay claims can be heard in the ordinary courts (ie a county court or the High Court) rather than the Employment Tribunal even if the time limit for bringing a claim in the Tribunal has passed. This is an important issue as employment tribunal claims have to be brought within six months of the date of termination of employment whereas contractual claims in the county/High Court have the much longer limitation period of six years from the date of the breach of contract.

Background

Given the volume of equal pay claims brought in the Employment Tribunal in recent years, an expectation has developed amongst lawyers and their clients that such claims will be brought in the Tribunal notwithstanding the fact that the Equal Pay Act 1970 gave claimants the option to progress claims in either the Tribunal or the ordinary courts. In the case of Birmingham City Council v Abdulla & others, however, 174 (predominantly female) claimants, who were former Council workers, brought claims for equal pay in the High Court. Their preference to do so was driven by the fact that they were out of time to launch claims in the Employment Tribunal as more than six months had passed from the date of termination of their employment.

The Council asked the High Court Judge to strike out the claims. The basis of the Council’s application was section 2(3) of the Equal Pay Act 1970 which provides:-

“Where it appears to the Court in which any proceedings are pending that a claim or counter-claim in respect of the operation of an equality clause could more conveniently be disposed of separately by an Employment Tribunal, the Court may direct that the claim or counter claim shall be struck out….”

The Council argued that complex equal pay claims like this belong in the Employment Tribunal due to the specialist expertise of the Tribunal as compared with that of the courts, the rules and procedures in the Tribunal as compared with those of the courts and the interests of the administration of justice in the allocation of the court’s resources. The fact that the claimants were out of time to bring claims in the Tribunal was irrelevant, according to the Council, even though it would mean that any Tribunal claims would inevitably be struck out.

The Judge rejected the Council’s application and that decision has now been upheld by both the Court of Appeal (last year) and the Supreme Court. The cases will, therefore, be allowed to proceed.

Implications

The judgment will mean institutions could be faced with equal pay claims from former employees that they simply haven’t bargained, or budgeted for. Whilst the education sector has not suffered from equal pay claims to anywhere near the same extent as local authorities, the decision nonetheless expands the number of people who could potentially bring claims. Whilst it has always been acknowledged that there is a risk of claims from existing, and very recently departed, staff, it is now clear that the risk extends to employees who left the institution within the last six years.

Aside from cost and budgetary issues, one of the concerns over having equal pay cases heard in the civil courts is that they lack the Employment Tribunal’s specialist expertise in employment practice and, in particular, in dealing with equal pay claims. However, as was pointed out in the judgment, it is still possible for civil courts to refer certain issues to the Tribunal to be dealt with, such as the question of whether the claimants and their comparators were doing equal work.

Another concern of employers relates to the prospect of having the pay the other side’s legal expenses if the claim succeeds: the general approach in the civil courts, which does not apply in the Tribunal, is to make an order for costs against the unsuccessful party. However, the Supreme Court noted that a court might decide not to apply the usual rule if it concludes that a successful claimant should, in all the circumstances, have presented her claim, in time, to the Tribunal, instead of bringing it in court.

Birmingham City Council v Abdulla & others, [2012] UKSC 47, 24 October 2012