The Supreme Court’s decision in Birmingham City Council v Abdulla is a significant development in equal pay law, opening the way for many cases which would previously been time barred. The time limit for bringing equal pay claims in the employment tribunal is six months, and unlike other types of discrimination claims, there is no scope in the tribunal rules for an employment tribunal to allow out of time claims on the ground that is just and equitable to do so. However, the mechanism used to implement the right to equal pay is to imply an equality clause into every employment contract – and of course the ordinary courts have jurisdiction to hear claims for breach of contract – for which the limitation period is six years not six months.
This is the route 175 claimants whose claims were time barred in the employment tribunal successfully took in this case. The respondent, Birmingham City Council, asked for their claims to be struck out under a power allowing the court to strike out claims if they can “more conveniently” disposed of by an employment tribunal. Continue reading
The Government issued its BIS "Modern Workplaces Consultation" on 16 May 2011 . One of the topics covered is "Equal Pay". Consultation closes on 8 August 2011.
The introduction to this section of the consultation document says:
We aim to ensure that employers who have breached the law on equal pay take appropriate action to rectify the problem. We therefore propose to require employment tribunals to make an employer, who is found to have discriminated on pay, conduct a pay audit (unless the tribunal feels this would not be productive).
According to the consultation document "Equal pay audits involve comparing the pay of women and men doing equal work, investigating the causes of any potential discrepancies, and closing any gaps that cannot be satisfactorily explained on grounds other than sex". This is presumably a shorthand description as the consultation document makes it plain elsewhere that an audit would cover not only jobs which are alike but also jobs which are rated as equivalent and jobs of equal value.
Examples of the sort of situations where a tribunal would not order an equal pay audit are given – for example where a pay audit has already been conducted within the previous three years or transparent pay practices are already in place. A "small employer" exemption is being considered. If a tribunal does order an equal pay audit the employer will be required to conduct to publish the results (subject to non-infringement of data protection rules) and consideration is being given to sanctions which would be imposed if an employer fails to comply.
The official June 2008 White Paper on the Equality Bill said that it would “ban pay secrecy and ‘gagging’ clauses which stop employees discussing pay with their colleagues”. The idea, of course, was to remove one of the practical difficulties sometimes faced by employees (generally women) seeking to bring equal pay claims on the basis that they are paid less than employees of the other sex who have been doing the same work, work of equal value or work rated as equivalent.
As eventually enacted the Equality Act 2010 does not do what the White Paper said. The basic idea is still there but the wording means that implementation of the idea is considerably more complicated than the simple wording of the White Paper suggested it would be.
On the other hand the Equality Act goes further than the extract above from the 2008 White Paper might suggest as it covers discussion of pay with third parties as well as with colleagues. Also it makes it unlawful for an employer to victimise an employee for seeking to enforce the rights it provides.
The most important difference between the original simple proposal and the eventual enactment is that the final version applies only in so far as the employee “makes or seeks to make a relevant pay disclosure”. This is defined as a disclosure “… made for the purpose of enabling the person who makes it, or the person to whom it is made, to find out whether or to what extent there is, in relation to the work in question, a connection between pay and having (or not having)…” any of the protected characteristics covered by the Act.
It is easy to see that this definition may lead to some difficulties. A pay disclosure is “relevant” only if it is made for the specified purpose. If it was made from some other purpose the Act will apparently not apply even if the information disclosed is later used for the specified purpose.
Separately but also connected with removing difficulties in the way of employees bringing equal pay claims, the Equality Act provides specific encouragement in the shape of informal “threat” of compulsion if encouragement has not worked by 2013 for larger employers (those with 250 or more employees) to publish information about differences in pay between male and female staff.
This is an item from our October 2010 newsletter. If you are interested in subscribing to our monthly newsletter please click here.