Birmingham council workers' ruling is significant for others making equal pay claims, says expert

Earlier this week the Supreme Court ruled that employees or former employees could bring equal pay claims to court within six years of having cause to do so even if their cases would otherwise have been deemed to have been more conveniently dealt with at an employment tribunal. Cases can generally only be brought before a tribunal during the period a person is employed by an organisation or within six months of having left that employment.

Birmingham City Council had argued that 174 former employees should be prevented from being able to have their equal pay claims heard by a court. The Council had said that the claims should have been dealt with by a tribunal but said that, as they had been brought outside of the six month deadline within which claims to tribunal could be made, they should be dismissed.

However, the Supreme Court rejected the Council's arguments.

"Previously the legislation was quite clear in that equal pay cases had to be brought to tribunal either during employment or within six months of employment terminating," said employment law expert Helen Corden of Pinsent Masons, the law firm behind Out-Law.com. "There were circumstances in which claims could be brought in the court but there is provision in the legislation which said that if the claims could be more conveniently disposed of in the tribunal then the case that has been brought in the court would be struck out."

"With the previous case law the view was that, if the case could have been brought in the tribunal, and the only reason why it hadn't been was because it was out of time and there was no good reason for the case having been brought out of time, then the claim would be struck out," Corden said. "This case has changed the position quite significantly because what the court is now saying is that it can never be the case that the claim could have been heard more conveniently in the tribunal if the effect is that the claim would, effectively, be struck out."

Under UK employment law women are entitled to the same pay as men in circumstances "where the woman is employed on work rated as equivalent with that of a man in the same employment".

The 174 workers, 170 of which were women, have claimed that Birmingham City Council "employed them on work rated as equivalent with that of certain men in the same employment" but that their equivalent male colleagues had contracts that provided for "the payment of the substantial bonuses and other additional payments" whereas their contracts did not. Each of the workers left their roles at the Council between August 2004 and November 2008. They have argued that they have a right to have their cases heard by a court.

In a split three-two decision among the judges, the Supreme Court said that Parliament's drafting of employment law had shown that whilst it had "conferred on the tribunal jurisdiction to determine a claim of breach of contract" for failing to comply with equal pay requirements, it "did not oust the jurisdiction of the court to determine such a claim" in so doing.

"That there was concurrent jurisdiction in the tribunal and the court is plain from [a reading of UK employment law first drafted in the 1970s], which is central to this appeal; and, over the four subsequent decades, such has been frequently acknowledged and never doubted," Lord Wilson said in the ruling.

The Court then found that Parliament had not intended, by setting a time limit on tribunal cases being brought, to prevent cases being brought before a court at a later date even if it would have been more convenient for the case to have been brought before a tribunal. It said that a High Court judge had been wrong to rule otherwise.

"No doubt in most cases it will be more convenient for the tribunal to dispose of a claim in respect of the operation of an equality clause, provided that it can still be brought there, rather than for the court to do so," Lord Wilson said. "If the claim can no longer be brought there, the effect of Birmingham's submissions in this appeal, founded on the decision of [the High Court judge], would be to convert the reasons why the claimant had failed to present her claim in time to the tribunal into the factor determinative of whether it be struck out by the court."

"But I do not regard the reasons for [the judge's] failure as relevant in any way to the notion of convenience. In my view Birmingham aspires in effect to re-write [the rules around convenience]; and to introduce into the law a principle which would in some cases in effect serve to shorten the period of limitation allowed by Parliament for the bringing of claims in court," the judge said.

"I would hold that the present claims cannot more conveniently be disposed of by the tribunal and that Birmingham's invocation of [the rules on convenience] was rightly rejected both by the deputy judge and by the Court of Appeal," Lord Wilson said.

"Nothing can detract from the inherent jurisdiction of the court to strike out a claim in respect of the operation of an equality clause if it were to represent an abuse of its process; one example might be that of a claimant who had been invited to present a complaint in time to the tribunal but who had spurned the invitation in order to secure what the court considered to be an illegitimate advantage by bringing the claim before itself," Lord Wilson said. "But the subject of [the rules around convenience] was not abuse of process; and I would hold ... that a claim in respect of the operation of an equality clause can never more conveniently be disposed of by the tribunal if it would there be time-barred."

Corden said that the ruling "essentially extends the time limit for bringing equal pay claims."

"Previously there was some certainty that it had to be brought within six months but this ruling means that claims can now be brought in the court without being struck out and that workers have six years from the date of the cause of action to bring that claim," Corden said.

"The ruling is probably less significant for those bringing individual equal pay claims because ordinarily in those circumstances that claim would be brought within the six month time limit in the tribunal. It is probably more significant for claims such as those that Birmingham City Council are facing, where they are facing mass litigation which goes back over a number of years and there are a number of employees or ex-employees involved," the employment law specialist added.

"Although this case has attracted a significant amount of publicity, what the coverage has not explained is that these employees or ex-employees haven't actually won their claims yet. The main litigation is still to take place. They have only got over the first hurdle of being able to bring their claims outside of the ordinary time limit of six months. They have still got to show that there has been a breach of the equality clause, so there is a long way to go yet in relation to the litigation," Corden said.

"It is unclear what approach Birmingham City Council will take to responding to these claims. It could cost them millions to first of all fight these claims and then pay out any compensation, so they have got to weigh that up against what it might cost to settle the claims and avoid the protracted litigation that no doubt will ensue from here on in," she added.