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In a “landmark ruling” involving Birmingham City Council and the so-called Abdulla Group, the Supreme Court ruled this week that claimants in equal pay cases can present their claims in the High Court up to six years after leaving employment. This applies even when they are time-barred from bringing claims in the tribunal, where the time limit is six months from termination.
Thousands of workers could now bring equal pay claims to courts after the 174 women involved in this case won their pay equality compensation claims against their employer.
The women had worked in mainly traditional female roles, such as cooks and cleaners, but were denied bonuses handed out to traditionally male-dominated jobs, including refuse collectors, street cleaners and road workers.
Lawyers said the case will have huge implications, also for the staffing industry. Anne Pritam, employment partner at law firm Stephenson Harwood explains.
“In July 2010, 174 former employees of Birmingham City Council began litigation in the High Court against the Council, seeking redress for unequal pay. Usually, equal pay claims are brought in the employment tribunal.
“These employees chose the High Court because they had left the Council's employment between 2004 and 2008, and therefore none of them would have been able to bring a claim in the employment tribunal where there is a strict six-month time limit within which equal pay claims must be brought.
“By contrast, in the High Court, a claim for breach of contract (which is what an equal pay claim really is) can be presented up to 6 years after the breach – in this case, the last day on which the employees were paid at the unequal rate, i.e. their termination dates.”
She said that cautious employers should consider themselves potentially exposed to equal pay claims for six years post termination of employment, rather than 6 months.
“In large scale outsourcing or where there is a corporate sale purchasers and others who ultimately inherit liability for employee claims will need to take increased care in due diligence on employees' potential equal pay claims which may now present a real financial risk for much longer than was previously supposed. Where there is the possibility of negotiating the extent of liability, it may be possible to apportion liability for any ‘dormant’ High Court claims through indemnities.”