Local law firm, Gardner Leader, highlights the risk to employers of more equal pay claims after Supreme court ruling last week
Local solicitors and employment law experts, Gardner Leader, recommends businesses seek legal advice on equal pay and potential equal pay claims after warnings a flood of claims is expected following a Supreme Court ruling which, in effect, extended the deadline for claiming compensation from six months to six years.
On 24th October 2012 the Supreme Court published its judgment in the case of Birmingham City Council v Abdulla and others, which involved equal pay claims by workers at the Council. The Supreme Court ruling allows workers who miss the six-month deadline for claiming compensation through the employment tribunal to take their claim to the normal courts, where a six-year time limit applies.
The vast majority of the claimants were women who had worked as cleaners, home helps or similar with basic pay of between £10000 and £15000 per year. Men in equivalent male-dominated jobs such as refuse collectors, street cleaners and grave diggers earned similar basic wages but were able to earn bonuses of up to £15,000 per year which were not available to those in traditionally female-dominated jobs.
In 2007 and 2008 many female Council employees brought claims, arguing that the Council’s policy of not offering bonuses to women contravened equal pay rules. The employees won and they were awarded compensation.
But this was of no help to workers who had left the Council more than six months before, because the time limit for making a claim in the employment tribunal is six months from the date the employment ended. The group now known as ‘Abdulla’ was formed and the women took their claims to the High Court, where a time limit of six years applies. The Council responded with an application to have the claims struck out, the case was appealed to the Court of Appeal and now the Supreme Court has considered the case. The five-judge panel ruled 3 to 2 in the claimants’ favour confirming that they are able to bring their equal pay claims in the High Court.
Julie Taylor, employment law specialist at Gardner Leader, notes that while we have had equal pay legislation for 50 years, there are still discrepancies as this case highlights. Extending the time limit in which equal pay claims can be made potentially opens the door for more workers to come forward and also makes such claims more lucrative and worth pursuing. Therefore, it is possible we will see an increase in claims for employers to respond to through the civil courts. However, court action is generally more expensive than tribunal claims as there is greater financial risk for the losing side – who has to pick up the favoured party’s legal costs. This has implications for both the employer and worker to consider before action is taken.
Ultimately, employers should ensure that they understand the implied equality clause in employment contracts and take advice where necessary.
For more information, please contact Julie Taylor on 01635 508080.