Abdulla and Others v Birmingham City Council
| Jurisdiction | England & Wales |
| Judge | Lord Justice Mummery,Lord Justice Davis,Dame Janet Smith |
| Judgment Date | 29 November 2011 |
| Neutral Citation | [2011] EWCA Civ 1412 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2011/0078 |
| Date | 29 November 2011 |
[2011] EWCA Civ 1412
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MR COLIN EDELMAN QC
Sitting as a Deputy High Court Judge
HQ10X02926
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Mummery
Lord Justice Davis
and
Dame Janet Smith
Case No: A2/2011/0078
MR PAUL EPSTEIN QC and MS LOUISE CHUDLEIGH (instructed by Birmingham City Council Legal and Democratic Service) for the Appellant
MR ANDREW SHORT QC and MS NAOMI LING (instructed by Leigh Day & Co) for the Respondent
Introduction
This appeal is from an order made on 17 December 2010 by Mr Colin Edelman QC sitting as a Deputy Judge in the High Court. He dismissed, with costs, an application by the Birmingham City Council (the Council) under s.2(3) of the Equal Pay Act 1970 (the 1970 Act) for a declaration that the court has no jurisdiction, or should not exercise the jurisdiction which it may have, to determine equal pay claims brought against it by Mrs Abdulla and 174 other Claimants. Most of the Claimants are women and were formerly in the employment of the Council.
Permission to appeal was granted by Hooper LJ at a renewed oral hearing on 18 May 2011, Rimer LJ having refused permission on the paper application.
The appeal raises a significant point on the construction and application of the 1970 Act. In the majority of cases on equal pay to date the principal questions relate to the meaning of "pay", to the difficult exercise of selecting the appropriate comparator, and to the application of the "genuine material factor" (GMF) defence. In the current spate of equal pay litigation in the Employment Tribunals (ET) other questions have surfaced: the mechanics of the operation of the equality clause deemed by s.2(1) to be included in contracts of employment that do not include one, limitation periods, the appropriate remedies for breach of the equality clause, the allocation of equal pay cases in the respective jurisdictions exercised by the ordinary courts and by the ET, and the interaction of claims under the 1970 Act with claims under the Sex Discrimination Act 1975.
Although the Equality Act 2010 (the 2010 Act) repealed and replaced the earlier legislation on equal pay and sex discrimination, these cases were brought under the 1970 Act, which continues to apply to them. The 2010 Act does not alter the legal position on the particular points arising on this appeal.
The spotlight in this appeal shines on three of the less litigated corners of equal pay law.
In the first place, the jurisdiction of the ordinary courts to determine equal pay claims has been overshadowed and almost eclipsed by the volume of litigation in the ETs. An equal pay claim under the 1970 Act is based on a breach of contract by the employer in not complying with contractual obligations, as modified by the equality clause. That claim, as was common ground before us, may be brought like any other contract claim in the ordinary courts. The 1970 Act expressly gave claimants the option of bringing equal pay claims in the ET, which, until the Industrial Employment Extension of Jurisdiction (England and Wales) Order 1994, had no general jurisdiction to determine contract claims of any kind.
It was provided in s. 2 of the 1970 Act that:-
"(1) Any claim in respect of the contravention of a term modified or included by way of an equality clause, including a claim for arrears of remuneration or damages in respect of the contravention, may be presented by way of a complaint to an [employment tribunal.]"
Although the jurisdiction of the ET was concurrent with that of the ordinary courts, this is the first time that I have ever come across equal pay claims that were not brought in the ET. The reason for the Claimants' preference for the ordinary courts in these cases is that they have an insurmountable difficulty with the limitation period applicable in the ET. That brings me to the second point.
The limitation period applicable to the institution of proceedings in the ordinary courts for breach of contract differs from the limitation period for presenting complaints of unequal pay to the ET. The period of 6 years under the Limitation Act 1980 for instituting breach of contract proceedings in the ordinary courts runs from the date of the breach. If, however, a Claimant in an equal pay case opts for the ET, the complaint in a "standard case" such as this (cf cases of concealment, disability, or a stable employment relationship) had to be presented on or before "the qualifying date" (i.e. 6 months after the last date on which the Claimant was employed in the relevant employment: ss. 2 (4) and 2ZA of the 1970 Act). The ET had no power under the 1970 Act to extend the 6 month period. It is therefore perfectly possible, as is assumed to be the case here, for proceedings to be instituted in time in the ordinary courts, but after the limitation period has expired for presenting a complaint to the ET. If these cases are not allowed to proceed in the ordinary courts, which undoubtedly have jurisdiction to determine them, the Claimants are out of time for presenting complaints to the ET. (I should add that under s. 2(5) of the 1970 Act six years arrears of pay can be recovered in an equal pay case, but, of course, the complaint must have been presented to the ET or the proceedings instituted in the ordinary courts before the expiry of the relevant limitation period.)
In the third place, the ordinary courts were given a statutory discretion either to strike out an equal pay claim, if it "could be more conveniently disposed of" separately by an ET, or to refer an equal pay question for determination by the ET and to stay the pending proceedings in the meantime.
Section 2 of the 1970 Act provided that:-
"(3) Where it appears to the court in which any proceedings are pending that a claim or counter-claim in respect of the operation of an equality clause could more conveniently be disposed of separately by an employment tribunal, the court may direct that the claim or counter-claim shall be struck out; and (without prejudice to the foregoing) where in proceedings before any court a question arises as to the operation of an equality clause, the court may on the application of any party to the proceedings or otherwise refer that question, or direct it to be referred by a party to the proceedings, to an employment tribunal for determination by the tribunal, and may stay or sist the proceedings in the meantime."
To strike out an in-time claim for breach of an equality clause is an extreme exercise of judicial discretion. To stay equal pay proceedings pending in the ordinary courts while awaiting the determination of a reference to the ET is a less drastic step. In the latter case the difference in the limitation periods applicable in the ordinary courts and in the ET could not lead to a situation in which the Claimants might be deprived of a determination of their equal pay claims on the merits. The ET would have jurisdiction to determine the matters referred to it by the ordinary courts. There would be no need for the Claimants to present a complaint to the ET. The equal pay proceedings instituted in time in the ordinary courts would remain extant pending the determination of the referred matter by the ET. The jurisdiction of the ET would stem from the reference to it by the ordinary courts in the exercise of their discretion. It would not depend on the Claimants' presentation of a complaint to the ET in time.
In the case of a strike out of an equal pay claim by the ordinary courts I note that it must appear to the court that the claim could be more conveniently disposed of "separately" by an ET. The references to comparative convenience and to "separately" suggest to me that the strike out discretion would certainly suit cases of multiple mixed claims, so that, on considerations of convenience, the ordinary courts could allocate different claims for determination in different jurisdictions, the equal pay claims being for the ET, while other breaches of contract are retained for determination in the ordinary courts. The question in these cases is whether striking out in-time equal pay claims in proceedings in the ordinary courts is apt in cases where it is too late to invoke the jurisdiction of the ET by presenting equal pay complaints to it.
The dilemma neatly presented by the chronology of these cases is that, if the court struck out these equal pay claims under s.2(3) on the ground that they could be "more conveniently" disposed of in the ET, the claims would have to be rejected by the ET for want of jurisdiction and the Claimants would be left without remedy for claims that might otherwise be well founded: s. 2(4) and 2ZA of the 1970 Act. As the deputy judge said:-
"16. The critical factor in respect of all of the Claimants in this action is that their employment with the Defendant terminated more than six months prior to the commencement of proceedings."
On its application to the High Court the Council's case was that the equal pay claims should be struck out, as they could be more conveniently disposed of by the expert and specialist ET and that the expiration of the time limit applicable to equal pay claims in the ET was an irrelevant factor in the exercise of the court's discretion under s.2(3). The deputy judge correctly rejected the contention that the ET time limit factor was irrelevant to the exercise of the court's discretion. As will be...
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