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Extension to Equal Pay Claims

12th November, 2012

A Landmark ruling has extended the time limit in which equal pay claims can be brought.

The Equality Act 2010 requires men and women who are employed doing “like work” “work related as equivalent” or “work of an equal value” to be engaged on equal terms and conditions in their contracts of employment. In order to make a comparison in terms of equal pay, both employees must be in the same employment, meaning that they have the same, or an associated, employer. For the purposes of the Equality Act 2010, “equality of terms” includes contractual pay and can also include other terms and conditions of employment such as the provision of a company car, healthcare and other employment related benefits. A difference between any of these terms could give rise to a claim for equal pay provided that the work undertaken is broadly similar in nature and that any differences are not of practical importance; along with the other provisions as set out in the Equality Act 2010.

Equal pay claims can be brought in front of the Employment Tribunal whilst an individual is still employed, or within six months of termination of employment. However last week, in the case of Birmingham City Council v Abdulla v Ors [2012] UKSC 47, the Supreme Court ruled that 174 female workers can proceed with claims in relation to equal pay despite bringing their claims outside the six month time limit. They are claiming compensation after not being paid bonuses by their employer Birmingham Council (bonuses which were paid to male employees). The Supreme Court rejected Birmingham Council’s appeal that the workers should have brought claims within six months to the Employment Tribunal, instead holding that they have six years to make equal pay claims in the High Court. This means that they can now seek compensation through the civil courts system. It was held that the “question was whether the disposal of the claim in an employment tribunal was appropriate in the interests of justice”. Although the fact the claim would be time-barred in the tribunal is a highly relevant factor, it is not a conclusive one. It will be interesting to see whether we will now see an influx of previously time-barred claims being brought in front of the civil courts.

Concerns over equality and gender balance within the workplace is a topical issue. On 18 October 2012 the Department of Business, Innovation and Skills published the draft Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 for consultation. If approved, from October 2013, listed companies will be required to report on the number of men and women on their board, the number of men and women who are managers and the numbers of each in the organisation as a whole. Such companies will also be required to produce a report on their strategy, business model and any human rights issues. Consultation on these draft Regulations will end on 15 November 2012. For further information and to make comments on these proposals please visit: http://www.bis.gov.uk/assets/BISCore/business-law/docs/F/12-979-future-of-narrative-reporting-new-structure.pdf

In other news, Vice President of the European Commission, Viviane Reding, is asking for a vote this month on draft proposals which would require European companies with more than 250 employees and a revenue of more than 50 million euros to keep 40% of positions on their supervisory boards available for women by 1 January 2020 or face fines or exclusion from public contracts.

For further information or advice on current equality legislation, please contact Helen Watson by sending an e-mail to [email protected] or on 01244 405565.

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