Birmingham loses Supreme Court bid to strike out equal pay claims

The council had argued that the claims should have brought in the employment tribunal rather than the High Court and had moved for the claims to be disposed of in an employment tribunal, notwithstanding the fact that the claims there would be time-barred.

The claimants are former employees of Birmingham City Council who left their employment on various dates between 2004 and 2008. They allege that Birmingham was in breach of the ‘equality clause’ inserted into their contracts of employment by section 1(1) of the Equal Pay Act 1970, as substituted by section 8(1) of the Sex Discrimination Act 1975, by failing to provide certain benefits and other payments which were payable to workers of the opposite sex employed on work rated as equivalent.

The council told the Supreme Court that, while it recognised the concurrent jurisdiction of the High Court under the Equal Pay Act to determine the respondents’ claims, the ex-employees had not provided a reasonable explanation for their failure to bring their claims in the employment tribunal, where the applicable time limit would have been six months after leaving their employment. Their claims were later issued in the High Court, for which the time limit was six years from the date their cause of action accrued.

Birmingham has already unsuccessfully asked the High Court, and subsequently the Court of Appeal, to exercise the discretion provided by s 2(3) of the Equal Pay Act 1970 (as amended) to strike out the claims on the ground that they ‘could more conveniently be disposed of separately by an employment tribunal’.

The Supreme Court rejected the council's arguments by a majority of three to two.

In the majority judgment, given by Lord Wilson, the Supreme Court observed that it was a “striking feature of the six month limitation period set by the Act for claims in the employment tribunal that Parliament had never made it extendable, [suggesting] that Parliament recognised the availability of an alternative claim in court”.

The judgment went on: “The statutory objective of s 2(3) was the distribution of judicial business for resolution in the forum more fitted for it. In most cases it would be more convenient for an employment tribunal to dispose of a claim in respect of the operation of an equality clause, provided that it could still be brought there, rather than for the court to do so.

“The reasons for the failure of a claimant to bring the claim in the tribunal were not, however, relevant in any way to the notion of convenience, nor was a multi-factorial inquiry into the interests of justice required. Such claims, barring an abuse of process, could never be more conveniently disposed of by the tribunal if they would there be dismissed for being out of time.

The majority judgment also urged Parliament to consider extending the time limits in the Employment Tribunal for equal pay claims.

The dissenting judgment was give by Lord Sumption. It said that “allowing the claims to proceed in court frustrated the policy underlying the provisions of the Act relating to limitation. It was difficult to resolve the construction of s 2(3) by reference to the mere language of the Act and therefore important to examine Parliament’s underlying purpose in conferring jurisdiction on employment tribunals over equal treatment claims and providing special periods of limitation to apply to such claims in those tribunals.

“There were substantial advantages for both the parties and for the broader interests of justice in having claims heard in employment tribunals. Limitation was a particularly important defence for employers facing equal treatment claims, and this point more plausibly explained the absence of any provision to defer the running of time. Lord Sumption would have held that ‘convenience’ under s 2(3) went further than the narrow question of the more efficient distribution of judicial business. The fact that a claim would be time-barred in the employment tribunal was a highly relevant but not conclusive factor”.

A copy of the full judgment (Birmingham City Council (Appellant) v Abdulla and others (Respondents) [2012] UKSC 47) is available from the Supreme Court at the following link: www.supremecourt.gov.uk/decided-cases/index.html

Solicitors for the claimants, Leigh Day & Co, said the 174 former staff could be entitled to up to £2m between them and up to another 1,000 former city council employees could also submit claims.