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Equal pay: a new six-year claim limit?

Equal pay claims

In recent weeks, much has been said about the high profile ruling in Birmingham City Council v Abdulla and others 2012. The case involved 174 female ex-employees of Birmingham City Council (BCC) who had found out - quite some time after the termination of their employment - that BCC had provided greater benefits and payments to male ex-colleagues who were employed to do “equivalent work” during the time of their own employment.

Outside the tribunal time limit

As this discovery was made more than six months after the women’s employment had ended, they were “time barred” from bringing an equal pay claim in the tribunal. Undeterred, they issued a group claim in the High Court on breach of contract grounds. Here, the time limit is six years from the date of the alleged unlawful act. In response, BCC argued that their claims should be struck out because: (1) they “could have been more conveniently disposed of” by the tribunal; and (2) this is the correct forum for this type of claim, not the civil courts.

But that’s perfectly OK

The High Court disagreed (as did the Court of Appeal), so BCC appealed this point to the Supreme Court. It considered the relevant legislation, namely the Equal Pay Act 1970 (which is now part of the Equality Act 2010) and noted that Parliament hadnever made the tribunal’s six-month time limit extendable (unlike other types of discrimination claim where it has the discretion to do this if it so wishes).

Because it’s only fair

It felt this was most probably because the alternative breach of contract option was readily available. The Supreme Court, therefore, concluded that equal pay claims can “never be more conveniently disposed of by the tribunal particularly where it meant claimants would be time barred”. This, in itself, would be “unjust and inequitable” to all those who discover that there was a potential equal pay issue after they’ve left an employer.

Note. The Supreme Court did, however, state that the only time this rule would not apply is where the proceedings have been brought without good reason and/or with malice, as this would amount to an abuse of process.

Tip 1. So, despite what you might have read, this particular case does not infer any significant new rights on employees; all it does is confirm the application of a law that already existed.

Tip 2. You can also ignore any suggestion that this case is going to open the floodgates for equal pay claims from former employees. Whilst it’s theoretically possible, it’s unlikely because individuals who resort to the civil courts will need to have regard to the rule that the loser pays the winner’s costs. These can be substantial!

Tip 3. If you need more information on equal pay, download the relevant Code of Practice from the Equality and Human Rights Commission’s website.

For a link to the Equal Pay Code of Practice, visit http://personnel.indicator.co.uk(PS 14.21.03).