Crown Office Row Pupil Emma Harris comments on the case of Birmingham v Abdulla and Others in which 174 former employees, joined as Claimants to the single action, brought a claim in the High Court against Birmingham City Council for an alleged breach of the “equality clause”.
Background of the Claim
All but four of the Claimants were women who claimed that their contracts had failed to include their entitlement to bonuses and additional payments that their male counterparts had been receiving. The Defendant sought to strike out the claim on the basis that it ought to have been brought in the employment tribunal and that the only reason they had failed to do so was because the Claimants were out of time (falling past the date six months after the termination of their employment contracts).
The Defendant’s application to strike out was based upon the proper construction of section 2(3) of the Equal Pay Act 1970 (now reproduced in section 128 of the Equality Act 2010):
“Where it appears to a court in which any proceedings are pending that a claim or counter-claim relating in respect of the operation of an equality clause could more conveniently be disposed of by an employment tribunal, the court may direct that the claim or counterclaim shall be struck out.”
The question for the court was whether it could ever be more convenient to refer a claim to the tribunal when the tribunal would be forced to refuse jurisdiction due to the claim being out of time. The Deputy Judge dismissed the application, firmly holding that it could never be more convenient to refer to a tribunal in these circumstances, and the Court of Appeal agreed save with the qualification that in the exercise of the court’s discretion, the fact that a complaint to the tribunal would be time-barred would be no more than “a circumstance of considerable weight in such cases“.
The Defendant further averred that the Claimant should be required to demonstrate good reasons why the claim had not been brought in time in the tribunal but the Court of Appeal held that reasons for the Claimants’ failure would be irrelevant unless the Defendant were applying to strike out the claim for abuse of process.
Supreme Court Judgment
In the Supreme Court, Lord Wilson, supported by a majority, agreed with the Court of Appeal in dismissing the Defendant’s submission that the Claimant should demonstrate reasons why the claim had not been brought in the tribunal and further dismissed a modified version of this submission that a multi-factorial inquiry should be conducted into this, as well as other features, in order to determine whether, in the interests of justice, the claim should be struck out.
When considering the application of the word “convenient”, Lord Wilson decided that what was required was “a straightforward practical inquiry into the forum more convenient for investigation of the merits [of the claim]“. He added that this would be analogous to the practical inquiry required when considering the test in rule 7.3 of the CPR as to whether it was convenient to dispose of all claims under the same claim form in the same proceedings.
He supported the categorical terms used by the deputy judge rather than the qualified approach of the Court of Appeal as he considered that “a claim in respect of the operation of an equality clause can never more conveniently be disposed of by the tribunal if it would there be time-barred”.
In making this decision, Lord Wilson, did acknowledge the Defendant’s concern that Claimants may be encouraged to pursue their claims in the courts rather than in the tribunals if they perceive that they then may be entitled to the traditional costs order if they are successful. He highlighted, however, that it is within the courts power to make a different order and that the Claimants’ reasons for failing to bring the claim in the tribunal would become relevant when the court considered the conduct of the parties for the purposes of costs.
This landmark decision has effectively extended the time limit for bringing equal pay claims from six months to six years by allowing such claims to be brought in the courts where the time for reference to the tribunal has expired. The tribunals had always previously been considered the appropriate venue for equal pay claims as they were experienced and specifically trained to handle this area, the purpose of employment tribunals and the intention of Parliament in conferring on them the jurisdiction that they have being a significant consideration of Lord Sumption (dissenting). The courts, however, did maintain a concurrent jurisdiction and, though the reasons for this were disputed between the members of the Supreme Court, as a result, the situation now exists where the courts may increasingly be required to deal with cases whose most appropriate forum would have been the tribunals, but for the strict time limit. It is expected that thousands of former local government workers alone could be affected by this decision in addition to former employees from numerous other sectors and it is therefore anticipated that the consequence of this judgment could be very far-reaching.
In relation to costs, the cost of bringing claims in the courts is generally higher than bringing claims through the tribunals but, given that costs orders are incredibly rare in the tribunals, it is likely that (as implied by Lord Wilson) no order as to costs will be made in the majority of cases brought through the courts so as to prevent Claimants from gaining an advantage from delaying the bringing of their claim. Although not a possibility considered by the Supreme Court, it is also possible that Claimants could face adverse costs orders in relation to costs that would not otherwise have been incurred if the tribunal system had been utilised. Such a costs order would assist in deterring Claimants from seeking to bring their claims outside of the tribunals and encourage early resolution of disputes.
The Equality Act 2010 uses the “more convenient” test not only in relation to equal pay claims but also, in section 122, in claims relating to all non-discrimination rules. The effect of this judgment may therefore have a wider application outside of equal pay claims and may have had the effect of extending the limitation period to six years for far more categories of claim than are immediately apparent.