Landmark Supreme Court Ruling

Helen O'Brien writes:

London, 25 October 2012 – Despite reports claiming that a landmark legal ruling could create a deluge of equal wage claims, employment law adviser Croner says that equal pay cases are relatively rare and employers in the private sector particularly should not be unduly worried by this new development.

The decision by the UK Supreme Court that allows equal pay cases to be heard in civil courts rather than employment tribunals will however mean that UK bosses will have to be able to justify pay rate histories for ex-employees for at least six years, which is radically different to the six months for an employment tribunal, says Croner (www.cronersolutions.co.uk), part of global information services business, Wolters Kluwer.

Employers should be warned that “Civil courts” and “tribunal” are not interchangeable words for the same process. They are two entirely separate procedures.

If a claim is made in the civil court system is made in the first six months which could be dealt with more appropriately by an employment tribunal, then the civil court can strike out the claim and direct the claimant to bring the claim in front of an employment tribunal. It is important to note that this is discretionary; however it would be unusual for an employee to prefer the civil courts over an employment tribunal.

An advantage to the civil courts route is that successful parties can recover costs, which may be a better forum for those with a good case, but which may also induce employers to be more ready to settle.

The provisions have been transferred into the Equality Act 2010, and so the civil courts continue to have jurisdiction in respect of sex equality clauses or rules, and maternity equality clauses or rules up to six years from the unfair act of the employer.

Commenting on the decision, Richard Smith, Head of Employment Law at Croner, says: “Equal pay cases are relatively rare and even in employment tribunals are very difficult to deal with. Employers have to show why a man and woman with comparable roles are paid differently. If they can’t do that they generally lose the case and the woman will gain compensation.

“Many employers have weak systems and cannot explain historical differences in pay. The news yesterday means that they are going to have to start recording pay data and decisions or be even more assiduous with their record keeping.

“There is also the possibility that ex-employees, particularly in the public sector may decide to launch their own claim, which they wouldn’t have been able to do if the Supreme Court had not allowed equal pay claims to be heard in a civil court.”

Croner recommends that employers review their pay arrangements and introduce objective schemes where necessary. All data and information relating to pay should be held in a central place, preferably securely online as paper trails get lost and memories are fallible and may not be a reliable source of evidence.