Introduction
- The application with which I have to deal is made by the Defendant pursuant to an Application Notice dated 19 August 2010. The Defendant's application is for:
"An order containing a declaration that the court has no jurisdiction or should not exercise its jurisdiction which it may have in accordance with CPR Rule 11."
The application is supported by the witness statement of Sally Jean Watts, who is employed by the Defendant as a Senior Solicitor. That Witness Statement explains that the application to contest the jurisdiction of the Court is made under Section 2(3) of the Equal Pay Act 1970 ("EPA"), which is the relevant statutory provision for the purposes of these claims.
- Section 2(3) of the EPA provides as follows:
"(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."
- The way in which the Defendant's case was put before me is that I should refuse to accept jurisdiction for the Court on this claim on the grounds that it could more conveniently be disposed of separately by an Employment Tribunal and that accordingly I should strike out the claim.
Background
- There are 174 Claimants in this action. They are former employees of the Defendant. With four exceptions, they are women. They bring claims alleging a failure on the Defendant's part to pay them in accordance with their contracts of employment as varied by the operation of the equality clause implied into those contracts by Section 1 of the EPA. Sub-section (1) of that Section provides as follows:
"(1) If the terms of a contract under which a woman is employed at an establishment in Great Britain do not include (directly or by reference to a collective agreement or otherwise) an equality clause they shall be deemed to include one."
- It is alleged by the Claimants that they were each employed in a role that had been graded in accordance with the Job Evaluation Scheme included within the collectively agreed terms and conditions known as "The National Joint Council for Local Authorities' Services (Manual Workers) Handbook" ("the Blue Book"). It is further alleged that they were paid less than comparators employed in roles which were rated as equivalent in the Blue Book. As regards work "rated as equivalent" Section l(2)(b) of the EPA provides as follows:
"(2) An equality clause is a provision which relates to terms (whether concerned with pay or not) of a contract under which a woman is employed (the "woman's contract"), and has the effect that...
(b) where the woman is employed on work rated as equivalent with that of a man in the same employment -
(i) if (apart from the equality clause) any term of the woman's contract determined by the rating of the work is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman's contract shall be treated as so modified as not to be less favourable, and
(ii) if (apart from the equality clause) at any time the woman's contract does not include a term corresponding to a term benefiting that man included in the contract under which he is employed and determined by the rating of the work, the woman's contract shall be treated as including such a term."
- The operation of the equality clause is qualified by Section 1(3) of the EPA which provides, insofar as material, as follows:
"(3) An equality clause falling within sub-section (2) ... (b) ... above shall not operate in relation to a variation between the woman's contract and the man's contract if the employer proves that the variation is genuinely due to a material factor which is not the difference of sex and that factor -
(a) in the case of an equality clause falling within sub-section (2) ... (b) above, must be a material difference between the woman's case and the man's ..."
- The evidence provided to me for the purposes of my consideration of this Application included the Witness Statement of Ms Watts to which I have referred, the Witness Statement of Christopher Benson, a partner at Leigh Day & Co., solicitors for the Claimants, and Witness Statements from the following six sample Claimants:
(1) Annette Poole who worked for the Defendant as a Lunchtime Supervisor at a school from May 1998 until July 2007;
(2) Linda Manders who worked for the Defendant as a Lunchtime Supervisor at a school between April 1998 and May 2008;
(3) Barbara Drinkwater who worked for the Defendant as a Catering Supervisor for about 30 years until May 2005;
(4) Susan Fisher who worked for the Defendant as a General Assistant for about 23 years until February 2007;
(5) Joan Clulow who worked for Defendant as a Home Care Assistant between 1980 and April 2006;
(6) Geraldine Pearson who was employed by the Defendant as a Home Care Assistant between 1998 and August 2005.
- The above Claimants refer to having heard from colleagues of their receipt of equal pay compensation payments from the Defendant.
- The Claim Form in this action was issued on 30 July 2010. The list of Claimants appended to the Particulars of Claim reveals "End Dates" (i.e. termination of employment dates) for the Claimants which range from 1 August 2004 to 14 November 2008.
- A complaint about the contravention of an equality clause can be made to an Employment Tribunal. Section 2(1) of the EPA provides as follows:
"(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."
At the time of the enactment of the original form of Section 2(1), at which time what are now known as Employment Tribunals were known as Industrial Tribunals, Industrial Tribunals had no jurisdiction to deal with contractual claims. The jurisdiction of Industrial Tribunals to deal with contractual claims was not conferred until 1994, under the Industrial Tribunals Extension of Jurisdiction (England and Wales) Order 1994, (SI 1994/1623) ("the 1994 Order").
Time Limits
- Section 2(4) of the EPA provides, insofar as is material, as follows:
"(4) No determination may be made by an Employment Tribunal in the following proceedings -
(a) on a complaint under sub-section (1) above ...
unless the proceedings are instituted on or before the qualifying date (determined in accordance with Section 2ZA below)."
- Section 2ZA defines the qualifying date for four types of case, which can be summarised for the purposes of this application as follows:
(i) A "concealment case", where a relevant fact has been concealed from the woman;
(ii) A "disability case", where the woman was under a disability at any time during the six months after the last day on which she was employed in the employment;
(iii) A "stable employment case", where there is a stable employment relationship between the woman and the employer notwithstanding that there are gaps in the continuity of the employment;
(iv A "standard case", which is none of the above.
Section 2ZA(3) provides that in a standard case, the qualifying date is six months after the last day on which the woman was employed in the employment. Under Section 2ZA(4)-(7), provision is made for a similar six month period following on from the ending of the stable employment relationship, the date on which the concealment was or could with reasonable diligence been discovered and the cessation of the disability. There is no provision conferring on an Employment Tribunal any discretion to extend the period of six months for the presentation of a complaint beyond the time limits specified in Sections 2(4) and 2ZA.
- Section 2(5) provides for a time limit for an award of arrears of remuneration or damages. It provides as follows:
"(5) A woman shall not be entitled, in proceedings brought in respect of a contravention of a term modified or included by virtue of an equality clause (including proceedings before an Employment Tribunal), to be awarded any payment by way of arrears of remuneration or damages -
(a) in proceedings in England and Wales, in respect of a time earlier than the arrears date (determined in accordance with Section 2ZB below)."
- Section 2ZB provides for the "arrears date" to be six years before the day on which the proceedings were instituted, save in the case of concealment or disability for which special provision is made.
- Sections 2(5) and 2ZB therefore put an equal pay claimant in a similar position to a claimant in an ordinary breach of contract case claiming arrears of remuneration or damages, in that there is a six year limitation period, subject to cases of concealment or disability.
- 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. Furthermore, in none of the sample cases for which I was provided with evidence is there any basis for suggesting that any of the Claimants was suffering from a disability during the six months following the termination of their employment (there is evidence of a mental health issue affecting one of the Claimants but that relates to a period prior to the termination of employment). There may be a possibility of concealment being alleged and proved against the Defendant but the requirement is that there should be deliberate concealment, which is a high standard for the Claimants to prove, and in any event the evidence I have indicates that news of the availability of retrospective equality clause compensation payments had spread amongst the Defendant's workforce and former employees some time ago.
- The assumption which I therefore make for the purposes of this application is that all of the Claimants are likely to be out of time for the presentation of complaints to an Employment Tribunal and would have been out of time when the Claim Form was issued. Accordingly, if I accede to the Defendant's application, the Claimants will not have any forum in which to pursue their claims.
The Issue
- In essence, the issue between the parties was as to the true construction of Section 2(3) of the EPA and in particular the scope of the matters which a Court ought to consider for the purposes of deciding whether a claim "could more conveniently be disposed of separately by an Employment Tribunal" and the scope of the discretion conferred by the words "the court may direct that the claim or counter-claim shall be struck out". The Defendant contends that these words should be narrowly construed and applied in that on the question of convenience, the Court should only take into account whether claims of this nature could more conveniently be disposed of by an Employment Tribunal and if the answer to that was "yes", the exercise of discretion should ordinarily follow that conclusion. The Claimants contend that the provision is aimed at the Court deciding which is the most convenient forum for the determination of the claim on its merits and that the discretion is a general one.
The Submissions
- On behalf of the Defendant, Paul Epstein QC submitted that the word "conveniently" must be construed as requiring regard to be had, amongst other things, to the nature of the claim made, the specialist experience of the Employment Tribunals as compared to the Courts, the rules and procedures in the Employment Tribunals as compared to the Court and the interests of the administration of justice, including allocating an appropriate share of the Court's resources. He identified the following factors as indicating that the Claimants' claims were of a type which could more conveniently be disposed of by an Employment Tribunal:
(i) The character of an Employment Tribunal as an "industrial jury";
(ii) The specialist training provided for Employment Judges who hear equal pay cases;
(iii) The route of appeal from Employment Tribunals to the specialist Employment Appeals Tribunal;
(iv) The unified Employment Tribunal system within Great Britain;
(v) The contrast between the above structures and those applicable to proceedings in the High Court;
(vi) The detailed rules of procedure that Employment Tribunals can apply in order to assist them to determine complex equal value claims;
(vii) The powers available to Employment Tribunals for the appointment of an independent expert to provide a report on the question of equal value;
(viii) The administrative burden that would be placed on the Court and on Defendants in having to deal with claims like this as part of High Court litigation.
- Although Mr Epstein recognised that the consequence of striking out these claims would be that all or virtually all of the Claimants would not be able to pursue their claims, he submitted that the time limits for making a complaint to an Employment Tribunal are well known and that the witness evidence before me showed that there was knowledge amongst the Claimants that the Defendant had been making offers in respect of equal pay claims. Accordingly, I should not have any compunction about striking out the claims. If there were any genuine cases of deliberate concealment or disability, those cases could be argued before an Employment Tribunal.
- Mr Epstein contended that the approach that 1 should adopt as to the application of Section 2(3) is that it was designed to ensure that complex equal pay cases were allocated to Employment Tribunals. It was not, he contended, to be treated as conferring on Claimants a licence to "forum shop" for a better limitation period. He made the point that Parliament could simply have conferred on the Court the right to refer issues to an Employment Tribunal had it been intended that there should be concurrent jurisdiction but rather, Parliament had chosen to confer on the Court the power to strike out the claim.
- As regards the complexity of this case, he submitted that complex issues could arise as to comparators and under Section 1(3) of the EPA ("the GMF Defence") and that there could be complex issues on remedy. He therefore submitted that this was the type of case that ought to be dealt with by an Employment Tribunal and the fact that the Employment Tribunal would dispose of the case on time bar grounds rather than on the merits was not a relevant factor.
- In support of his submissions, he referred me to the decision of HHJ Owen QC in Ashby & Others v. Birmingham City Council, 13 October 2009. In that case, which was another equal pay claim, HHJ Owen QC acceded to the application to strike out the claimants' claims, notwithstanding that they would be out of time for presentation of a complaint to the Employment Tribunal. He expressed his conclusion in the following terms, at paragraph 33:
"... I am satisfied that this is a claim, viewed objectively, which would be determined conveniently by an Employment Tribunal and not by a County Court. I am satisfied that the only reason why it occurred to anybody to bring these claims before a County Court was because of the stark reality that they are now so stale that they have lost any viability before the Employment Tribunal by reason of the time bar. But that is not a fact, in my judgement, which would render an otherwise convenient method of determination being rendered inconvenient or vice versa."
Mr Epstein, who also acts for the Defendant in that case, informed me that an appeal had been heard against that decision on the day before the hearing in this case took place but that the judgment had been reserved. I was not invited to adjourn this Application pending the handing down of a judgment on that appeal although it is obviously unfortunate that there was not some better coordination between the two cases.
- On behalf of the Claimants, Andrew Short QC submitted as follows:
(i) A claim for equal pay is a claim in respect of breach of contract (Sorbie v. Trust House Forte Hotels Limited [1976] IRLR 371 [9], Levez v. T.H. Jennings (Harlow Pools) Limited (No. 2) [2000] ICR 58 [20], Gutridge v. Sodexo [2009] ICR 1486 [23-27, 47] and Hartlepool Borough Council v. Llewellyn [2009] ICR 1426 [34-36]);
(ii) The provisions of the EPA, in particular Section 2(3), (4) and (5), contemplate that a claim may be brought before the Courts rather than before an Employment Tribunal and this has been recognised by the Courts (Levez (No. 2), supra, [21]);
(iii) The words "disposed of" must contemplate a disposal by way of a determination on the merits and cannot contemplate a disposal whereby the Employment Tribunal refuses to accept jurisdiction on the grounds that the claim is out of time;
(iv) On the basis of the above meaning of "disposed of", the words "could ... be disposed of" in Section 2(3) must be contemplating that there can still be a determination on the merits by the Employment Tribunal, otherwise the statute would have used the words "could or could have been ... disposed of";
(v) It cannot be more convenient for these claims to be disposed of by an Employment Tribunal in circumstances where the Employment Tribunal will not be deciding the case at all but will be refusing to accept jurisdiction due to the time bar;
(vi) The Courts are well used to dealing with complex claims and even if this claim is a complex one, the Court would be able to deal with it under its procedures or alternatively could refer issues to an Employment Tribunal for determination under Section 2(3);
(vii) In fact this is not a complex case because the claim is based on work rated as equivalent under Section 1(2)(b) of the EPA and in Barker v. Birmingham City Council, Employment Judge Goodier rejected the Defendant's GMF Defences in relation to the categories of employees who would fall for consideration in this case and reached the provisional conclusion that they had been unreasonably pursued;
(viii) The balance of hardship favours the Claimants because they would be left without remedy and whilst allowing the claims to proceed would place a burden on the Defendant, the number of cases is modest, the main issue is likely to be quantum and the Defendant brought the claims on itself by failing to deal with its discriminatory pay structure.
- In support of his submissions, Mr Short relied on the terms of the 1994 Order, the Employment Protection (Consolidation) Act 1978 and the Equality Act 2010. However, as those statutory provisions post-date the EPA and Section 2(3) of the EPA remains substantially in the same terms as when first enacted, I do not consider that it is permissible for me to have regard to subsequent legislative provisions in order to construe Section 2(3).
- There is one additional aspect of Mr Short's submissions which I will deal with separately and that is his reliance on the principle of equivalence. It was common ground that as these claims have their origins in rights conferred by European Community law ("EC rights"), they are subject to the principle of equivalence. This principle dictates that national rules which give effect to EC rights must not be less favourable than those that govern similar domestic actions (Levez v. T.H. Jennings (Harlow Pools) Limited [1999] IRLR 36, [18], ECJ).
- Mr Short submitted that the claims in this case are directly comparable to other claims based on a failure to pay an employee in accordance with the terms of her contract and for which Employment Tribunals and the Civil Courts now have dual jurisdiction (Levez (No. 2), [23]). Therefore, if Section 2(3) is construed as the Defendant seeks to construe it, it would create for the vast majority of claims for arrears of remuneration based on the equality clause a stricter time limit for those whose employment had terminated than would apply to a comparable contract claim for, for example, an unlawful deduction from wages. In that the former case the Claimant would only have six months from the termination employment within which to bring a claim, whilst in the latter the employee would have six years from the date of the unlawful deduction.
- In response to this submission, Mr Epstein relied on the decision of the House of Lords in Preston v. Wolverhampton Healthcare NHS Trust & Others (No. 2) [2001] 2 AC 455. That case concerned a claim by part-time workers who claimed that they had been unlawfully excluded from occupational pension schemes because membership was dependent on an employee working a minimum number of hours per week and that that was discriminatory because a considerably higher proportion of part-time workers were women. Section 2(4) of the EPA fell for consideration in that case because Regulation 12 of the Occupational Pension Schemes (Equal Access to Membership) Regulations 1976 (SI 1976/142) provided as follows:
"(1) The Equal Pay Act shall be so modified as to provide that where a Court or an Industrial Tribunal finds that there has been a breach of a term in a contract of employment which has been included in the contract, or modified, by virtue of an equality clause and which relates to membership of a scheme, or where it makes an order declaring the right of an employee to admission to membership of a scheme in pursuance of the equal access requirements, it may declare that the employee has a right to be admitted to the scheme in question with effect from such date ('the deemed entry date') as it may specify, not being earlier than whichever is the later of the following dates -
(a) 6 April 1978; and
(b) the date two years before the institution of the proceedings in which the order was made."
However, as recorded in Preston by Lord Slynn, at paragraph 12, the two year provision in Regulation 12 (and what was then an equivalent two year provision in Section 2(5) of the EPA) could not be relied on to defeat a claim for periods prior to the two year period to be taken into account on the basis that such restrictions were precluded by Community law. Therefore, in Preston the House of Lords had to approach the principle of equivalence on the basis that future pension benefits had to be calculated by reference to full- and part-time periods of service subsequent to 8 April 1976 (Preston [12]).
- Mr Epstein relied on the following passages in the speech of Lord Slynn at paragraphs 28-30:
"28. In the present case it seems to me that there was an obligation to admit the employee to the scheme and to provide payments for the employee's future pension periodically during a period of employment. That obligation may have been on a daily or weekly or other periodic basis but each time there was an obligation to admit to the scheme and to make the necessary payments to the trustees and the obligation was breached a complete cause of action arose since the damage existed at once. The next time the obligation was breached a separate cause of action occurred in respect of the second breach. The time limit of six years runs from each complete cause of action. Accordingly I do not accept that the comparison is between six years from the date of termination of employment for all failures to carry out the equality clause obligations by giving access to the scheme and six months from the date of termination under Section 2(4). Once six years had run in respect of each specific breach claims in respect of that breach were statute barred.
29. There is still a six-year period for contract claims rather than a six- month claim for infringement of Article 119. This, however, is not the end of the enquiry. Merely to look at the limitation periods is not sufficient. It is necessary to have regard to "the role played by that position in the procedure as a whole as well as the operation and any special features of that procedure before the different national Courts." [2001] 2 AC 415, 452a-b, para 61.
In Levez v. T.H. Jennings (Harlow Pools) Limited (Case C-326/96) [1999] ICR 521, 546, the Court of Justice said:
51. On that point, it is appropriate to consider whether in order to fully assert rights conferred by Community law before the County Court, an employee in circumstances such as those of the Applicant will incur additional costs and delay by comparison with a Claimant who because he is relying on what may be regarded as a similar right under domestic law, may bring an action before the Industrial Tribunal, which is simpler, and in principle, less costly.
30. There are thus factors to be set against the difference in litigation periods. As has already been seen the claim under a contract can only go back six years from the date of the claim whereas a claim brought within six months of the termination of employment can go back to the beginning of employment or 8 April 1976 (the date of the judgment in Defrenne v. Sabena (Case 43/75) [1976] ICR 547) whichever is the later. Moreover the Claimant can wait until the employment is over, thus avoiding the possibility of friction with the employer if proceedings to protect her position are brought during the period of employment, as will be necessary since the six year limitation runs from the accrual of a cause of action. It is in my view also relevant to have regard to the lower costs involved in the claim before an Employment Tribunal and if proceedings finish there the shorter time- scale involved. The period of six months itself is not an unreasonably short period for a claim to be referred to an Employment Tribunal. The informality of the proceedings is also a relevant factor."
- On the above basis, it was held that Section 2(4) of the EPA did not offend against the principle of equivalence and Mr Epstein relied on that to support a submission that, if he was right about the effect of Section 2(3), the same conclusion must apply. Mr Short sought to distinguish Preston on the grounds that he was not challenging the limitation imposed by Section 2(4) on access to an Employment Tribunal but rather whether a limitation should be imposed on access to the Civil Courts through Section 2(3). Mr Epstein's response was that the effect of the decision of the House of Lords in Preston was to determine that the imposition of a time limit by reference to access to an Employment Tribunal did not breach the principle of equivalence and Section 2(4) must "speak with one voice".
Decision
- As both counsel recognised in their submissions to me, what I am confronted with is, essentially, a short question of construction. The relevant context in which Section 2(3) falls to be construed is that at the time of the enactment of the EPA, Industrial Tribunals (as they then were) did not have any jurisdiction to deal with contractual claims. The method adopted under the EPA in order to secure the right to equal pay was through the contractual route of the deemed inclusion in a contract of employment of an equality clause (Section 1(1) of the EPA and Levez (No. 2) at paragraph 20). The adoption of that contractual approach would have resulted in only the Courts having jurisdiction to deal with equal pay claims (until the subsequent extension of the jurisdiction of Tribunals to deal with contract claims under the 1994 Order). Therefore, Section 2(1) of the EPA can be seen as a provision which, exceptionally, conferred on Tribunals jurisdiction to deal with a claim which was in nature a contractual claim. No doubt this was because the claim was only contractual by virtue of a statutory deeming provision and it was considered as being a type of claim which it would be appropriate for Tribunals to determine.
- It would, of course, have been open to Parliament to specify that all equality clause claims should be dealt with by Tribunals but instead the approach adopted in Section 2(1) was merely to confer on those wishing to pursue a claim an option to present it to an Employment Tribunal ("... any claim ... may be presented by way of a complaint to" an Industrial/Employment Tribunal). This necessarily pre-supposes that it was open to a claimant not to pursue that option and instead to commence Court proceedings.
- The period allowed for the presentation of a complaint to an Industrial/Employment Tribunal from the date of the matter complained of has traditionally been short, measured in months rather than years. It is not, therefore, surprising to find that in the EPA a short time limit for presentation of a complaint to a Tribunal (six months) is specified in Section 2(4). What would be surprising, were it not for the existence of an option not to present a complaint to a Tribunal but to commence Court proceedings, is the absence of any power on the part of the Tribunal to extend the six month period. I regard this as yet another indication that the commencement of Court proceedings was being treated in the statute as a real and available option for claimants.
- Once seen in that context, the intended operation of Section 2(3) in my judgement becomes clear. It is contemplated that the claimant has elected, for whatever reason, not to pursue the claim by presentation of a complaint to an Employment Tribunal but instead has proceeded by way of a Court action. The Court then has to decide whether, notwithstanding the choice made by the claimant, it would be more convenient for the claim to be disposed of by an Employment Tribunal. That must be contemplating a disposal by a determination on the merits of the particular case. I do not consider it to be consistent either with the meaning conveyed by the language or by the context in which the language appears that it could be regarded as more convenient for a claim to be disposed of by an Employment Tribunal in circumstances where it is known to the Court that the Tribunal would have to decline jurisdiction to deal with the claim on the basis that it is out of time pursuant to Section 2(4).
- It is also telling that if a Court decides that a claim could more conveniently be disposed of separately by an Employment Tribunal, Section 2(3) does not impose an obligation to strike out the claim but merely a discretion. If the Defendant's construction of Section 2(3) is right, this would mean that there was an absolute time bar applying to a complaint to a Tribunal but, in effect, an entirely discretionary time bar as regards Court proceedings. If Parliament had intended the time limit under Section 2(4) to be the effective time limit for cases which were more conveniently dealt with separately by an Employment Tribunal, which is the effect of the Defendant's submissions, one would have expected Section 2(3) to impose an obligation on the Court to strike out the claim rather than conferring a discretion on the Court and, what is more, a completely unfettered discretion. If, as the Defendant contends, this was intended to be a provision linked to Section 2(4), even if there was not an obligation to strike out, one would at least have expected there to be defined criteria for the exercise of the discretion, as one usually finds in provisions which permit discretionary relaxations of a time bar.
- I am further reinforced in my conclusion as to the true meaning and effect of Section 2(3) by the second half of the sub-section. The power conferred on the Court to refer a question as to the operation of an equality clause to an Employment Tribunal for determination and to stay the proceedings in the meantime contemplates that the Court might well be dealing with an equal pay claim which is not entirely straightforward and which would benefit from the attributes, expertise and procedures of an Employment Tribunal. If the Defendant was right about the approach to the application of the first part of Section 2(3), it is difficult to see how a case which a Court might regard as containing issues suitable for reference to an Employment Tribunal could survive an application to strike it out. Mr Epstein suggested that Section 2(3) could operate in the manner he suggested on the basis that it was contemplating proceedings where there were a number of claims of which the equal pay element only formed part. However, that submission cannot live with the language of Section 2(3) because that contemplates the striking out of "a claim or counter-claim in respect of the operation an equality clause" and not the proceedings in which such a claim is made. It would therefore be open to the Court to strike out an equal pay claim which was one of a number of claims made in the proceedings. If the referral power was not contemplating that position, it must, in my judgement, have been contemplating a situation in which the Court had taken the view that it was not convenient to require the Claimant to pursue the equal pay claim by way of a complaint before an Employment Tribunal but it was, nonetheless, appropriate for certain issues relating to the equality clause to be determined by an Employment Tribunal.
- A further reason for rejecting the Defendant's construction of Section 2(3) is that it would have arbitrary results. On the Defendant's case, a complex equal pay claim would be susceptible to being struck out under Section 2(3) but an equal pay claim which was straightforward and did not therefore require the specialist attention of an Employment Tribunal would not be struck out. The result would be that for the simpler claim, the only time bar applicable to the claimant after termination of employment would be that arising under Section 2(5) (six years from the arrears date) whereas in the former case the claimant would only have six months from the date of termination in which to present a claim. This is counter-intuitive as, if anything, one would expect greater latitude to be shown for the presentation of a more complex claim as compared to a straightforward claim. Parliament cannot have intended such arbitrary results from the application of Section 2(3).
- Whilst there is no evidential basis on which I could reach any conclusion in this case as to whether or not there has been "forum shopping", I recognise the risk that as a result of the above construction of Section 2(3) there could be forum shopping, with claimants waiting until the six month time limit for presentation of a complaint to an Industrial Tribunal has expired before commencing proceedings so as to avoid the risk of the claim being struck out. However, firstly Parliament has merely conferred an option for claimants to pursue their claim before an Employment Tribunal and it would be wrong for the Court to turn that option into an obligation by preventing those claimants from pursuing a claim before the Courts after the time period for presentation of a complaint to an Employment Tribunal has expired; and secondly, the Court has ample discretionary powers available to it in order to prevent abuse. For example, it could refer all of the substantive issues between the parties as to the operation of the equality clause to an Employment Tribunal for determination, staying the proceedings in the meantime, and it could deal with either the costs of the action as a whole or of the issues determined by the Employment Tribunal on the same basis as costs would have been dealt with had the claim proceeded by way of a complaint to an Employment Tribunal. I emphasise that I am not saying anything about how the costs of this action ought to be dealt with in the future, as that would be a matter for the discretion of the trial Judge in the light of all the circumstances then known.
- For the reasons given above, I reject the submission by the Defendant that convenience must be judged in some abstract way by reference to whether a case with the characteristics of that being considered by the Court would be more conveniently dealt with by an Employment Tribunal. On the true construction of Section 2(3), it cannot be more convenient for a claim to be disposed of separately by an Employment Tribunal in circumstances where the Employment Tribunal could not determine the claim on its merits but would be bound to refuse jurisdiction to deal with the claim because it was time barred. In those circumstances, whether or not the claim made by these Claimants will or will not prove to be a complex one is not a relevant consideration. If it had been a relevant consideration, the best I would have been able to do in the absence of a Statement of Defence would have been to conclude that the truth as to the complexity of these claims is likely to lie somewhere between the positions adopted by the parties before me. I anticipate that many of the battles relevant to these equal pay claims may already have been fought in the Barker case but that there may well be additional or alternative issues that the Defendant will seek to raise. Once the Defendant has served its Statement of Defence, a judgement could be made as to whether it is appropriate to refer any issues to an Employment Tribunal for determination.
- I recognise that the conclusion I have reached is inconsistent with that reached by HHJ Owen QC in the Ashby case. He appears to have reached the conclusion on the evidence before him that "the only reason why it occurred to anybody to bring these claims before a County Court was because of the stark reality that they are now so stale that they have lost any viability before the Employment Tribunal by reason of the time bar". In one sense, that is doing no more than to state the obvious - namely that once the time bar had arisen under Section 2(4), the only option available to the claimants if they wished to pursue their claim was by way of Court proceedings. That does not seem to me to take the issue as to the application of the statutory provisions any further. Although he did not elaborate on how he reached his conclusions by reference to the relevant statutory provisions, fundamentally his approach appears to have been to read the relevant provisions of Section 2 of the EPA as if it was imposing some quasi obligation on a claimant wishing to make an equal pay claim to pursue that claim by way of a complaint before an Employment Tribunal. For the reasons given above, I do not consider that that is what Section 2 does.
- I have reached my conclusion as the operation of Section 2(3) without reference to or reliance on the principle of equivalence. However, in deference to the arguments that were presented to me, I will briefly state my conclusions on that aspect of the submissions. I bear well in mind the importance of not considering a particular procedural rule in isolation but rather taking into account the procedural rules as a whole. In particular, as was pointed out in Preston, the comparison is not between a limitation period of six months for presentation of a complaint to an Employment Tribunal and six years for the commencement of a Court action because the six month period for presentation of a complaint to an Employment Tribunal only runs from the date of termination of employment. For those whose employment has not terminated, the difference will be immaterial because of the operation of Section 2(5). The difference comes into play only for those whose employment has been terminated and whose claim is in respect of arrears due for a period less than five and a half years before termination (arrears going back more than five and a half years before termination would be barred under Section 2(5) of the EPA by the expiration of six months from the termination of employment in any event). However, that is likely to be a relatively important sub-group.
- At first blush, the decision in Preston would appear to support the Defendant's submission that even if Section 2(3) did, in its practical effect, ordinarily impose a time limit of six months from the termination of employment for the pursuit of an equal pay claim, notwithstanding that the claimant sought to pursue that claim in the Courts rather than before an Employment Tribunal, that would not breach the principle of equivalence. However, on close analysis it does not seem to me that the decision in Preston is determinative. In particular:
(i) The issue in Preston was whether the claimants were barred from pursuing their claim before a Tribunal rather than, as in this case, whether they should be barred from pursuing a claim in the High Court, notwithstanding that the claim was within the statutory limitation period for the making of a claim for breach of contract;
(ii) The claim in Preston was in relation to pension benefits and the principle of equivalence fell to be considered in the context that the Rules then in Section 2(5) of the EPA and in Regulation 12 of the Occupational Pension Schemes (Equal Access to Membership) Regulations 1976 as to how far back any date of admission to membership of a pension scheme could go were precluded by Community law, with the result that on a successful claim future pension benefits would have to be calculated by reference to full- and part-time periods of service subsequent to 8 April 1976. The impact of this on the principle of equivalence was that whereas an ordinary contractual claim before the Courts could only go back six years from the date of the claim, a claim brought within six months of the termination of employment in respect of exclusion from pension scheme membership could go back to the beginning of employment or 8 April 1976, whichever was the later. This meant that the employee would not have to watch out for the six year period, but could wait until the termination of the employment in order to pursue a claim.
- In Preston, at paragraph 30, Lord Slynn referred to the lower costs and shorter time- scales involved in Employment Tribunal proceedings. Whilst I do not have the evidence on which to base any conclusion as to whether that consideration is still applicable, I have to bear in mind the complexity that is now associated with equal pay cases, which the Defendant emphasised in its evidence and submissions. Indeed, the decision in the Barker case runs to 167 pages of single-spaced text, the hearing was held on various dates in November and December 2009 and March 2010 and the reason that the case was heard by an employment Judge sitting alone was because such a lengthy hearing was required that it was impractical to secure the attendance of lay members for the duration of the hearing. As I have said, though, I do not have any evidence to justify a departure from what was said in Preston about the costs and timescale of Employment Tribunal proceedings.
- On the application of the principle of equivalence, it seems to me that the application of a time limit of six months from the date of termination would potentially have arbitrary consequences. As I understand the position, in this case there is an issue as to the payment of bonuses to male workers which were not paid to female workers on work which it is said was rated as equivalent. If one was to hypothesise an employer, fearing an equal pay claim, unilaterally withdrawing the bonuses from the male employees, that employer would expose himself to contractual claims by the male employees for payment of the bonuses that were unilaterally withdrawn whilst also facing claims from female employees for payment of amounts equal to the bonus payments, for periods both before and after the unilateral withdrawal, on the basis of the equality clause. In such a case, both the male and the female claimants would be subject to the six year limitation period for claiming arrears specified by Section 2(5) but the female workers would, if Section 2(3) has the effect contended for by the Defendant, be subjected to an additional limitation on their right to claim, namely that the claim must be made within six months of the termination of their employment, whilst the male workers claiming for their arrears of bonus payments would not be subject to any such limitation.
- Even when taking into account the entirety of the procedural setting, it seems to me that such a distinction would offend against the principle of equivalence. The decision in Preston is distinguishable for the reasons given above and accordingly, had I concluded that the Defendant's submission as to the effect of Section 2(3) was correct, I would have refused to strike out the Claimants' claim on the grounds that to do so would offend against the principle of equivalence.
- Even if I was to be wrong about the "convenience" test and about the principle of equivalence, Section 2(3) does not oblige the Court to strike out a claim which could more conveniently be disposed of separately by an Employment Tribunal but, as I have indicated, confers on the Court a discretion to do so. In circumstances where the Defendant has not sought to persuade me that the claims have no real prospect of success, which would have been a difficult submission for the Defendant to have made in any event in the light of the decision in the Barker case (although I am told that that decision is the subject of an appeal), what I am, in reality, being asked to do is to strike out claims which have a real prospect of success and which are within the six year limitation period, in circumstances where the effect of my striking out the claims would confer on the Defendant the windfall benefit of debarring the Claimants from pursuing their claims. It does not seem to me that the interests of justice would be served by my exercising my discretion in such a way, in particular in circumstances where the Court has power to refer issues to an Employment Tribunal for determination so as to take advantage of the expertise and procedures available to Employment Tribunals. Accordingly, even if I had concluded that it was more convenient for these claims to be disposed of separately by an Employment Tribunal and that the principle of equivalence did not apply, I would have exercised my discretion so as to refuse to strike out the claims.
- In the circumstances, the Defendant's application to strike out these claims is dismissed.
