Further equal pay update

9 April 2009

We report on another recent case relating to equal pay.  This is important but as is often the case the application of the law can be involved so some explanation is needed.

In Joyce Slack & Ors  -v- Cumbria County Council the Court of Appeal (CA) considered the six months time limit for instituting equal pay proceedings in the Employment Tribunal (ET).  The question to be determined was: when does the six months begin to run against the claimant?

Ordinarily, this is a straightforward question addressed by section 2(4) of the Equal Pay Act 1970 (EPA) which states that, no equal pay claim can be referred to the ET if the claimant has not been employed in the employment within the preceding six months. In other words time begins to run when the claimant ceased to be employed in the employment.

However the time limit provision in section 2 (4) was amended with effect from 9 July 2003.  The new Section 2ZA introduced the notion of a qualifying date whereby a claim must be lodged on or before the qualifying date. The qualifying date is the date falling six months after the last day on which the woman was employed in the employment. 

If a single contract has been terminated and the employment comes to an end, there is no difficulty in identifying the last day of employment and when the six-months period begins to run.  Difficulties arise where there has been a succession of contracts between the parties.  If there is more than one contract, can the claimant wait until six months after the last contract has ended or does she have to bring proceedings in respect of each contract within six months of its termination?

In Cumbria County Council all the claimants were working under contracts of employment where the terms had been altered at some stage during their overall period of employment.  On each occasion the claimants were issued with a new contract of employment.  There was no break in service.

Mrs Slack who had been continually employed by the Council as a cook since 1971 reduced her hours of work from 37 to 30 per week in 2000.  She was supplied with a letter headed contract of employment incorporating statement of written particulars; which she duly signed.

Mrs Elliott who was continuously employed as a day care assistant from 1996 also changed her hours from 28 to 21 per week in 2000 and signed a document agreeing to the change.

Mrs Athersmith was employed as a relief home care assistant from 1 November 2000.  In April 2001 she accepted a permanent position that resulted in a change in her status entitling her to occupational sick pay.  Mrs Athersmith also signed a document agreeing to the change.

The Council argued that at the end of the alteration, the existing contract of employment had been terminated and a new contract had been substituted.  The claimants, having failed to lodge claims within six months of the date on which their earlier contracts terminated were out of time in respect of the period to which that contract related.  This, if successful, would limit the arrears payable by the Council to successful claimants, to the period covering the final contract of employment.

The Claimants put forward five different arguments contending that the claimants had lodged their claims on time.   They argued:

1. The employment contracts were only varied.
2. A time limit is not triggered until the expiry of the final contract in a series of contracts where an employees contract is terminated but continues under another, and the employee carries out substantially the same work under it.
3. An overriding contract should be implied into a series of contracts without a break and that time does not start to run until the end of that contract.
4. Employment under section 2 (4) of the EPA meant the employment relationship and not the employment contract.
5. The cases should be regarded as stable employment cases within section 2ZA (2) of the EPA so that the time limit is not triggered until expiry of the stable employment.

The CA rejected the claimants first four arguments stating that the test of employment was contractual and that it was neither necessary nor possible to imply an overriding contract of employment where express terms governing their employment, already existed.  However, the CA accepted the claimants concept of a stable employment relationship.  They held that between both Mrs Elliott and Mrs Slack and the Council there was a stable employment relationship and that the time limit had not been triggered. Both Mrs Slack and Mrs Elliott were held to have presented their claims on time.

However, in relation to Mrs Athersmith the CA held that the facts of this case were different and that changes in Mrs Athersmith's contract were more fundamental.  They held that without a proper investigation of the facts, at first instance, they could not rule on this case.  The CA therefore remitted Mrs Athersmith's case back to the ET to investigate further.

Employees often have a series of employment contracts governing their relationship with their employer. The outcome of this case proves worrying for those employers who seek to reduce any liability they might incur through arguing the claimants can only claim for the period during their final contract of employment; having failed to lodge a claim within six months of the earlier contract coming to an end.  However, what is interesting is that the CA failed to rule on Mrs Athersmith's case recognising the changes as more fundamental.  What amounts to a fundamental change and how a fundamental change in a contract affects the stable relationship remains unclear. It is therefore unclear whether an employee who resigns from a previous position and makes an application and undergoes an interview for a new position, without a break in employment, still continues to be employed in a stable employment relationship.