Legal Q&A: What does Birmingham City Council v Abdulla mean for equal pay claims?

It has been long accepted that the courts and the employment tribunals have concurrent jurisdiction to hear claims for breach of the statutory equality clause in a contract of employment (equal pay claims). Vanessa Hogan of Hogan Lovells considers the implications of the Supreme Court’s decision in Birmingham City Council v Abdullah and others, in which it ruled that 170 women who worked for Birmingham City Council can proceed with equal pay claims against their former employer in the civil courts, where the six-month employment tribunal time limit for bringing a claim had expired.

Q Why is this decision so important?

This decision by the Supreme Court confirms that the door is open for claimants to bring equal pay claims up to six years after their employment has terminated.

The equal pay principle is achieved by implying a “sex equality” clause into a woman’s contract of employment, thus ensuring that she receives equal pay for equal work. While the relevant legislation provides that an equal pay claim can be brought in the civil court as a breach of contract claim or in the employment tribunal, in practice the civil court has power to “pass” the claim to the employment tribunal to determine, if this is seen as the more “convenient” forum to hear the claim. The question that the Supreme Court faced was whether or not the High Court should strike out claims on the basis that the employment tribunal was the proper forum in circumstances where the claims would be out of time in the employment tribunal and therefore would be unable to proceed. The Supreme Court found that even where an equal pay claim would be out of time in the employment tribunal, it can still be brought in the civil courts.

This means that employers will no longer be “safe” from an equal pay claim after six months, but instead could be clock-watching for a further five and a half years, and ex-employees who may not have realised that they had been underpaid could get the opportunity to seek redress through the civil courts.

Q Are there any added risks in bringing an equal pay claim in the civil court instead of the employment tribunal?

There are significant cost risks in bringing a claim in the civil courts. Unlike in the employment tribunal where costs are awarded only in exceptional cases, in the civil courts, orders for the losing party to pay at least part of the winner’s costs are the norm. This will clearly be of concern to the individual litigant who will not only have to fund the case as it progresses in the civil court, but may also be stuck with a large costs bill for the other side’s costs at the end. That said, in practice it is relatively common to see equal pay claims backed by trade unions that will have deeper coffers to dip into in order to fund the claim.

Q Should employers be taking any immediate action as a result of this decision?

Employers that have had successful equal pay claims brought against them in the employment tribunal in the previous six years might want to think about reviewing their historic workforce to assess whether or not new claims could be brought by ex-employees who were not involved in the original employment tribunal claim. There are no specific actions that employers can take to mitigate such risks, but at least they will have the potential claims (and cost of dealing with them) on their radar.

Q The decision involves a public-sector employer – does this decision have the same implications for private-sector employers?

Private-sector employers are under the same equal pay obligations as the public sector. However, equal pay claims have historically been more prevalent in the public sector, where trade unions have been particularly active in the fight for equality. Therefore, while the Supreme Court’s decision has the same implications for private-sector employers as it does for public-sector employers, the risks of a claim probably still remain relatively low.

Vanessa Hogan is a senior associate in the employment department of Hogan Lovells

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