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Supreme Court

Supreme Court hands down landmark judgment allowing equal pay claims in the civil courts

Equal pay claims can now be heard in the civil courts as well as in employment tribunals

Posted on 24 October 2012

In a historic decision, Birmingham City Council has been unsuccessful in arguing that equal pay claims made by hundreds of women should be thrown out on legal grounds.

The judgment effectively extends the time limit for equal pay claims from six months to six years, the biggest change to Equal Pay legislation since it was introduced in 1970, with huge implications for thousands of workers.

Law firm Leigh Day & Co are bringing the claims against Birmingham City Council on behalf of 174 claimants, with another 1000 claims pending in Birmingham alone. There are also thousands more claims in other areas around the UK being handled by Leigh Day & Co awaiting this decision.

This is the latest legal failure for Birmingham City Council, who are estimated to have spent hundreds of thousands of pounds of tax payers’ money fighting the original decision made in the High Court in December 2010, which said that equal pay claims could be heard in the High Court as well as at an Employment Tribunal.
Birmingham City Council first appealed to the Court of Appeal, and when this was unsuccessful in November 2011, decided to appeal again to the Supreme Court, the highest Court in the country. The judgment confirms that equal pay claims can now be brought in the High Court up to six years after leaving employment where pay discrimination may have occurred.

Equal pay claims against local authorities have been widespread for years, and in particular since the implementation of the 1997 ‘single status’ agreement between trade unions and local authorities, designed to harmonise the conditions of former administrative, professional, technical and clerical staff with manual workers.

Historically male dominated jobs, for example, bin men, street sweepers and gravediggers received bonuses in addition to their basic salary. Female dominated jobs on the same grade would typically only receive their basic salary.

Chris Benson, partner in the employment team at Leigh Day said:

“This is a great day for equality and for all those women massively underpaid over many years within public and private organisations.

“Birmingham Council should now do the decent thing and settle the claims. They saved money by underpaying ex-workers for so many years, and so should now stop wasting taxpayers’ money fighting court cases they cannot win.

Leigh Day have brought these cases along with Outer Temple Chambers, whose barristers Andrew Short QC and Naomi Ling provided the advice and representation necessary to secure such a historic victory.
The Judgment:

Lord Wilson gave the judgment at the Supreme Court today on behalf of the majority, holding that the court should not strike out equal pay claims if they would be out of time in the employment tribunal [para 29].

It was common ground between the claimants and Birmingham that the claims were out of time in the employment tribunals [7]. It was also common ground that both the civil courts and the employment tribunals could hear equal pay claims [11, 17]. This is because the Equal Pay Act 1970 (the Act) operates by inserting a term about equal pay into every contract of employment [15].

The crucial issue was about the interpretation of a section in the Act that dealt with cases passing between the courts and tribunals – section 2(3). This section has two parts: first, that claims that can be “more conveniently disposed of separately by an employment tribunal” can be struck out by the courts; second, that the courts can to direct questions to employment tribunals [8].

Lord Wilson gave two arguments for why the claims should be allowed to proceed in the High Court. The first was that the Act, unlike many other pieces of employment legislation, had no provision for the time limit for bringing a claim to be extended at the discretion of the court or tribunal [20].

Second, section 2(4) (dealing with the six month time limit for employment tribunals) was worded so as to suggest that claims ending up in an employment tribunal as a result of section 2(3) were exempt from any time limit [21].

Birmingham had relied on analogies with cases which could be heard in more than one country, and said that similar principles should apply to this case – the court could refuse to hear the case even though it would be out of time in a foreign jurisdiction, and so they should be able to refuse to decide a claim that would be out of time in the tribunal [22 - 26]. Lord Wilson rejected that argument, holding that section 2(3) was about the distribution of judicial business, and that “disposing” of a claim did not include dismissing the claim because it was out of time [27].

Lord Wilson also dealt with the principle of equivalence, which is that procedural rules for claims brought under EU law should not be less favourable than those for similar domestic actions [32]. The conclusion was that the principle of equivalence would not be offended if the claims were struck out [34]. However, the main ruling of the court on the interpretation of section 2(3) made the principle of equivalence of limited importance.

The following table shows the disparity between only a few of the hundreds of claims currently being brought against Birmingham City Council. The grades are the Council’s own grading system and the figures given are actual direct comparators between female and male workers at Birmingham City Council in 2005 when many of the first round of cases date from, within a 6 year limit from when action was first taken:

BCC Grade Female Annual Salary Male Annual Salary Difference
Manual Grade 1 £10,872 £16,308 £5,436
MG2 £11,127  £30,599 £19,472
MG3 £11,286  £32,034 £20,748
MG4 £11,649  £32,034 £20,385
MG5 £12,018 £31,483  £19,465
MG6 £12,381 £31,483    £19,102