The Supreme Court has held, in the case of Birmingham City Council v Abdulla and others, that equal pay claims brought in the High Court, which were time-barred from being raised in the Employment Tribunal, should not be automatically struck out under the Equal Pay Act 1970 ("EPA 1970").
The EPA 1970 provides that equal pay claims must be raised in the Employment Tribunal within six months of the termination of the Claimant’s employment. Unlike other types of discrimination complaints, this time limit can only be extended in very limited circumstances. However, as equal pay law operates by implying an equality clause into every contract of employment, equal pay claims are, in effect, claims for breach of contract. Civil courts have an inherent jurisdiction to hear breach of contract claims, and the EPA 1970 provides that equal pay claims brought in the civil courts should only be struck out if that claim could "more conveniently be disposed of" by an Employment Tribunal. Breach of contract claims can be raised within a six year limitation period in England and Wales, and a five-year limitation period in Scotland.
In Abdulla, a large number of Claimants only found out well after their employment had terminated that their former employer, Birmingham City Council, had made equal pay compensation payments to former colleagues. The Claimants brought claims in the High Court, as they were beyond the six month time limit to raise complaints before the Employment Tribunal. The employer argued that the claims could "more conveniently be disposed of" by a Tribunal, as it had the relevant expertise to determine what was a legally complex type of claim. The Claimants argued that the claims could not be more conveniently disposed of in this way, as they were time barred from raising Tribunal claims.
The High Court rejected the employer’s arguments and determined that the Claimants’ claims could proceed. This decision was upheld by the Court of Appeal, and has now, again, been upheld by the Supreme Court. The Supreme Court confirmed that, whilst in most cases equal pay claims would be more conveniently disposed of by a Tribunal, this could not be the case where the claim was time barred before the Tribunal. Relevant to its decision was the fact that the six month time limit was not extendable in standard cases. It also confirmed that the reason why the Claimant had not brought a timely complaint in the Tribunal was irrelevant, unless there had been a deliberate abuse of process.
Impact for Employers
- This decision means that former employees can now raise equal pay claims against their employers up to 6 years after the end of their employment in England and Wales, and up to 5 years after the end of their employment in Scotland. This might result in an increase to the number of claims employers may face. However, bringing claims in the civil courts is not without financial risk, as traditionally the losing party has to meet the other party’s costs. This will be an important consideration for both employees and employers.
- Whilst this case was determined under the provisions of the Equal Pay Act 1970, the relevant provisions of the Equality Act 2010 are identical, and so the result would be the same in respect of Equality Act 2010 equal pay claims.