Equal pay cases are likely to rocket if a case awaiting judgement in the
European Court of Justice goes against the employer.
The warning comes in the wake of proposals by the Government to speed up
equal pay claims which include simplifying procedures for group actions and
extending the time limit for bringing a claim. These are likely to have a
significant impact on wage bills.
But it could be a drop in the ocean compared to the sums involved if a group
of north Yorkshire dinner ladies wins its case.
"The potential implications of the case are staggering," according
to Malcolm Pike, employment partner at Addleshaw Booth. "On the face of
it, it means any employee in the country who is doing equivalent work to
someone else, whoever their employer, could be entitled to equal pay with that
person." It could even lead to industry-wide bargaining, he warned.
In Lawrence and others v Regent Office Care, contract workers who
transferred to a private catering company when North Yorkshire County Council
contracted out the provision of school meals claim that under article 141 of
the EU Treaty they are entitled to compare their pay with that of their former
local authority colleagues.
Under the Equal Pay Act 1970 workers can only claim equal value if their
case involves the same employer. But article 141 sets out no such restriction.
The question is whether this article can be directly relied on by the UK
workers.
The article has been held to have direct effect in other equal pay cases.
But this decision could go either way, Pike said. "The ECJ could decide
article 141 is simply too vague to be of direct effect in this case."
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