A battle of the courts

14 Dec 2011

The news that a lap dancer has been granted the right to appeal against Stringfellows as to whether she was employed by that esteemed establishment is, no doubt, guaranteed to attract attention; however, unfortunately, there is very little else that can be said about that case.

As a result, instead let's look at the considerably less salacious, but slightly more relevant case of Abdulla v Birmingham City Council, in which the Court of Appeal considered the proper arena in which to hear Equal Pay claims.

Most employers would, understandably, expect an Equal Pay claim to be brought in the Employment Tribunal; however, because the claim is, at its heart, one of breach of contract, it can, like other contractual claims, be brought in the High Court.

As most of you will know, unlike the Employment Tribunals, which, until the Government has its way, remain broadly a jurisdiction in which the parties bear their own costs, in the High Court, the losing party will also have to pay for the other side's legal costs.  This, along with the comparative informality of the Employment Tribunal process, is why Tribunals remain the court of choice for employees.

Usually contractual claims more normally seen before the Employment Tribunal are only bought in the High Court where the sum claimed exceeds the £25,000 limit for breach of contract in Tribunals.

Another reason for employees choosing to issue their claims before the High Court is because the time limits for initiating proceedings can differ.  An Equal Pay claim must be brought within a six month time limit in the Employment Tribunal.  In the High Court the time limit is six years.

In the Abdulla case, the employees missed the six month time limit and so issued their claims in the High Court.  The employer felt that the claims should have been issued in the Employment Tribunal and sought a declaration that the High Court had no jurisdiction to hear the claims.  The High Court disagreed and the employer appealed to the Court of Appeal.

The crux of the employer's argument was that the High Court has a discretion, under the Equal Pay Act 1970, to refer Equal Pay claims back to an Employment Tribunal if the claims could be more "conveniently disposed of separately by the tribunal".  Although it would, in normal circumstances, be more convenient for such claims to be heard by the Tribunal, in this case the employer (or perhaps more likely, their lawyer!) might well have been motivated by the fact that the claims would be struck out by the Tribunal for being out of time.

The Court of Appeal, quite rightly, concluded that the purpose of the discretion under the Equal Pay Act was to allow such claims to be heard in the most convenient and appropriate setting: it was not to give employers a back door route to strike out claims.

The moral of this case is twofold:  firstly, do not be lured into a sense of complacency the moment that the "normal" Employment Tribunal time limits have passed without receiving a claim; and, second, the courts are very happy to slap down lawyers who come up with cunning plans.