Court of Appeal widens rights to equal pay compensation

April 18, 2009

 Workers who are employed under an unbroken succession of contracts can now claim equal pay compensation for that string of contracts and not just the latest one, the Court of Appeal has ruled.

Those claims could previously only be made in relation to a series of short contracts with breaks in between them.

The Court has said that where people’s contracts are amended or changed slightly there is not a definitive break in their employment history and any equal pay grievances can be brought in relation to all of the contracts and not the most recent one.

A ruling from the European Court of Justice (ECJ) in a previous case created a situation of ‘stable employment’, where people on a series of short term contracts could make claims in relation to that string of contracts and not just the most recent one.

That ruling had suggested, though, that that right only existed in situations like the one on which the ECJ ruled, where there were short breaks between contracts. The Court of Appeal ruling means that the equal pay demands can be made where there are no breaks between contracts.

“The irresistible logic of the reasoning of the Court of Justice and of the purpose of the 2003 Regulations is that an uninterrupted succession of contracts is a … case of a stable employment relationship,” said Lord Justice Mummery in his ruling.

The case was between Joyce Slack and other employees and their employer, Cumbria County Council. It was one of thousands of equal pay claims facing local authorities across the UK. The Equality and Human Rights Commission (EHRC) also made arguments on behalf of the workers.

Slack and her colleagues had worked for the Council for many years but had requested changes in working practices that required changes to their contracts.

New contracts were issued and signed, and when Slack came to make an equal pay claim the Council said that it could only be made in relation to the most recent, changed contract.

Slack argued that the new contract was a variation of her original contract and did not terminate the original. The Council disagreed, as did the Court of Appeal.

“Each claimant signed a document containing detailed terms and conditions of employment,” said the Court’s ruling. “The document included terms which differed from the previous contracts. Each document expressly stated it superseded any previous contract of employment. The provision was flagged up to the recipients. The documents which each claimant has signed are not alleged to be shams, or to have been obtained by improper pressure, or to offend public policy.”

“Nor do they contain terms that are so unusual or onerous (such as exclusion or penalty clauses) that it can be argued that the Council was under a positive duty to draw them specifically to the attention of the claimants. The signed documents are new contracts. They are valid and binding,” it said.

The Court did allow the EHRC to introduce new arguments into proceedings, though. It said that though this was unusual it was necessary because these issues would have to be decided at some point because of the backlog of equal pay claims.

The EHRC said that the case was not a ‘standard’ one but one of ‘stable employment’, where a claim can apply not just to the most recent contract but to its predecessors, if the worker had been in a relationship of ‘stable employment’ with the employer.

The ECJ had created this category of claim in a ruling involving Wolverhampton Healthcare NHS Trust. It said that “where there has been a stable employment relationship resulting from a succession of short-term contracts concluded at regular intervals” a person could make a claim within six months of the end of a chain of such contracts.

The EHRC argued that Slack and her colleagues were in a position of ‘stable employment’ and the Court agreed in relation to Slack and one of her colleagues. It has sent the case of the third person back to the Employment Tribunal system to make a closer assessment of the facts of her case.

The ruling will make it possible for a greater number of workers to make equal pay claims for a longer amount of time. Claims can still only be made, though, in relation to the previous six years of work in England and five years in Scotland.

See: The ruling

 

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