Time Limits for Equal Pay Claims - Stable Employment Relationships

Local authorities across the UK face thousands of claims from women who contend that they have been paid less than men for doing similar work or work of equal value. Following a recent decision of the Court of Appeal, women who have worked for the same employer, doing substantially the same work under a series of continuous contracts, will be able to bring an equal pay claim that covers periods that predate their current contract of employment. In England, a successful claimant is entitled to back pay extending over a period of up to six years.

Until 2003, there was a six-month time limit for bringing an Employment Tribunal (ET) claim, under the Equal Pay Act 1970 (EPA), where this related to work under a previous contract with the same employer.

The concept of a 'stable employment relationship', in the context of time limits for equal pay claims, first emerged when the House of Lords made reference to the European Court of Justice (ECJ) in Preston v Wolverhampton Healthcare NHS Trust. The case concerned women teachers and lecturers who worked under a succession of contracts with breaks in between. The ECJ ruled that setting the starting point of the limitation period at the end of each contract rendered the exercise of the right to equal pay for equal work extremely difficult. The House of Lords subsequently held that where there is a succession of contracts at regular intervals in respect of the same employment in a stable employment relationship, the time limit for an equal pay claim runs from the end of the last contract forming part of that relationship. The ECJ's ruling was implemented into domestic law by the Equal Pay Act 1970 (Amendment) Regulations 2003.

In Slack and others v Cumbria County Council, Mrs Slack had worked continuously for the Council since 1971. In 2000, she wanted to reduce her hours and signed a new contract of employment. In all other respects, her job remained the same. In 2003, she presented an equal pay claim. The Council argued that a claim could only be made in relation to the varied contract because a claim in relation to the earlier contract was statute-barred as the time limit had expired.

The ET regarded the claim as a standard case rather than a stable employment relationship case. It upheld Mrs Slack's claim as in its view the case was one of a consensual variation of a continuing contract of employment rather than a new contract. Therefore, the claim in respect of the earlier period was not out of time.

On appeal, the Employment Appeal Tribunal (EAT), relying on the documentation, found that there was evidence that both parties had signed what was clearly stated to be a new contract, which was conclusive evidence of the termination of the earlier contract. The EAT did, however, express unease as this ruling meant that those in a similar position who had been sent a new contract but had not, for whatever reason, signed it were held to be subject only to a variation in their terms and conditions of employment.

When the case went to the Court of Appeal, the Court allowed the introduction of fresh legal arguments, put forward by the Equality and Human Rights Commission, on the interpretation and application of the 2003 amendments to the EPA and on questions of EC law. It decided to do so because the Tribunals are 'bursting at the seams' with equal pay claims and in hearing the arguments in this sample case, the ruling of the Court would help determine the outcome of similar claims.

The Court ruled that there was a new contract, which terminated and replaced the original contract of employment. However, Mrs Slack's claim could succeed on the ground that both contracts were part of stable employment as provided for by the 2003 Regulations. The time limit for bringing a claim was therefore six months after the day on which the stable employment ended.

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