Ashby & Ors v Birmingham City Council [2011] EWHC 424 (QB)

[2011] EWHC 424 (QB)

Case No 9BM03994

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Venue AT BIRMINGHAM CIVIL JUSTICE CENTRE

Date 03/03/2011

Before

THE HONOURABLE MRS JUSTICE SLADE DBE

Between

Ashby and othersClaimants/Appellants

Birmingham City CouncilDefendant/Respondent

Adrian Lynch QC and Simon Forshaw (instructed by BBH Solicitors) for Claimants/Appellants

Paul Epstein QC and Louise Chudleigh (instructed by David Tatlow, Solicitor Birmingham City Council) for Defendant/Respondent

Hearing Hearing date: 2 nd December 2010

Judgment

[1]Mrs Ashby and 13 others (‘the Appellants’) appeal from the decision of His Honour Judge Owen QC by judgment of 15th October 2009 (‘the judgment’) to strike out the Appellants’ claims against Birmingham City Council (‘the Council’) for damages for breach of contract. The breach was of the terms in their contracts of employment alleged to have been varied by operation of the equality clause implied by Section 2 of the Equal Pay Act 1970 as amended (‘EqPA’). The Equal Pay Act 1970 is repealed and the relevant provisions re-enacted in the Equality Act 2010 with replacement of the words ‘disposed of’ in EqPA Section 2(3) with ‘determined by’ in Section 128. References in this judgment are to EqPA.

[2]The Appellants are women, former home carers or home helpers, who were employed by the Council until dates between July 2003 and January 2006. They claim that the statutory equality clause operated to vary their contracts to give them an entitlement to bonuses and higher rates of basic pay paid to male comparators whom they allege were employed on work rated as equivalent or of equal value to theirs. They claim damages for breach of contract for the shortfall between their pay and that of their comparators for the period of six years up to the termination of their employment. They claim entitlement to a bonus as received by comparator gravediggers and a higher rate of basic pay as received by gardeners and gravediggers.

[3]Pursuant to Section 2(1) claims for breach of terms of contracts of employment statutorily varied by operation of EqPA may be brought in an Employment Tribunal. Since such claims are claims for breach of contract they may also be brought in the High Court or the County Court. The different limitation periods for bringing claims in the Employment Tribunal and in the courts gave rise to the decision to bring proceedings in the County Court in these cases. A claim to an Employment Tribunal in respect of the contravention of a term modified or included by virtue of an equality clause must be made in a ‘standard case’, which these are, on or before six months after the last day on which the woman was employed in the employment.

[4]The limitation period for bringing in the courts a breach of contract claim based on the operation of an equality clause statutorily implied by EqPA is that generally applicable to claims in contract pursuant to Limitation Act 1980 Section 2, six years from the date the cause of action accrued.

[5]In order to comply with the judgment in Levez v TH Jennings (Harlow Pools) Ltd of the European Court of Justice,

[1999] ICR 52

and of the Employment Appeal Tribunal,

[2000] ICR 58

, EqPA was amended to give successful claimants in proceedings before an Employment Tribunal equivalent rights to recover arrears of remuneration as in the ordinary courts. EqPA Sections 2(5) and 2ZB provide that successful claimants are entitled to recover a payment by way of remuneration in respect of a period starting six years before the day on which proceedings were instituted in the Employment Tribunal.

[6]The Appellants have not commenced proceedings under the EqPA in the Employment Tribunal. In standard cases such as these, applying EqPA Section 2(4) and 2ZA, the time for doing so elapsed the day after six months after the last day on which each of the Appellants was in the employment of the Council. In cases in which the statutory grievance procedure was applicable and was invoked there would have been a possible three month extension. Subject to this, the time limit cannot be extended. It is not in dispute between the parties that an Employment Tribunal would have no jurisdiction to hear and determine an equal pay complaint presented out of time. By the date of the hearing before HH Judge Owen QC on 13th October 2009 all the Appellants were too late for presenting complaints to an Employment Tribunal. The Employment Tribunal could only have dismissed their claims as being presented out of time.

[7]The Appellants started proceedings for breach of contract in the County Court on 25th March 2009. Their claims were all brought within the limitation period for claims to the County Court or the High Court.

[8]Counsel very experienced in this area, Adrian Lynch QC and Simon Forshaw for the Appellants and Paul Epstein QC and Louise Chudleigh for the Council, did not know of equal pay claims being brought in the ordinary courts until recently. However after the conclusion of the hearing, counsel drew my attention to Abdulla and ors v Birmingham City Council

[2010] EWHC 3303 (QB)

a judgment of 17th December 2010 of Colin Edelman QC sitting as a Deputy High Court Judge. The Judge dismissed an application by the Council to strike out under Section 2(3) claims in breach of contract based on the EqPA. As in this case, the claimants were seeking to recover in the courts the shortfall between their pay and that of a male comparator. Mr Lynch submitted that the judgment in Abdulla supports the Appellants’ case.

[9]Whilst other provisions in EqPA are relevant to the determination of this appeal, at its heart is the proper construction of Section 2(3) which provides:

“Where it appears to the court in which any proceedings are pending that a claim or counterclaim 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 counterclaim 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 application to strike out the claims before the County Court

[10]The basis for the Council’s application to strike out the Appellants’ claims before the County Court was formulated by counsel in a case summary dated 30th June 2009 as follows:

“7….all claims by Cs are considerably outside the limitation period for bringing a claim in the ET. They seek to overcome that limitation period by bringing these claims in the County Court. The question is whether this is permissible.”

[11]In the skeleton argument in support of the application to strike out the claims under EqPA Section 2(3), counsel stated at paragraph 25:

“In the present case 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 ET as compared to the court, the rules and procedures in the ET as compared to the court, and the interests of the administration of justice, including allotting an appropriate share of the Court’s resources.”

Counsel referred to the consequence of allowing these claims to continue in the County Court:

“39. If these C’s are permitted to continue with these claims, it is highly probable that there will be numerous other claims brought against D, both with and without the benefit of conditional fee agreements, seeking to take advantage of the more generous six year limitation period in contract actions in the County Court as compared with the primary limitation period of six months in a standard case in the ET. Equally, it is not difficult to see that there could be other such claims brought in relation to other public bodies, including NHS Trusts.”

I do not understand counsel for the Appellants to have doubted this proposition. Counsel for the Council correctly anticipated the argument of the Appellants resisting their application to strike out the claims. “41. No doubt the main argument C’s will use is that it cannot be ‘convenient’ for their claims to be disposed of in the ET since they are now out of time.”

[12]A statement from Anthony McKeever, solicitor for the Appellants, was before the County Court. At paragraph 13 he said:

“There is a suggestion that the Claimants could or should have brought proceedings within the employment tribunal time limits and that this county court action is an abuse of process. Each of the 14 Claimants was unaware of the (alleged) disparity in pay structures between men and women until 2008, as set out in their witness statements.”

Each of the Appellants made statements to similar effect.

[13]In a skeleton argument for the County Court, counsel then acting for the Appellants wrote at paragraph 24:

“The Overriding Point 24. Since the employment tribunal lacks a jurisdiction to hear these claims, a breach of contract claim in the county court is the only jurisdiction available to the Claimants. This is not a situation where the pros and cons of the respective venues can be sensibly balanced against each other. There is only one venue available to the Claimants – the county court – so ipso facto that must be the most convenient venue in which to dispose of the claims.”

[14]By their Defence, the Council admitted that the Appellants’ jobs of home help and home care assistant had been rated higher than that of grave digger. The Council denied that the Appellants were employed on work of equal value to those of gravedigger or gardener.

[15]The Council contended that the difference in entitlement to bonus and in rate of basic pay between the Appellants and gardeners or gravediggers was genuinely due to a material factor not being the difference in sex (a ‘GMF defence’).

[16]It appears from the Council’s Defence that what would be in issue in the proceedings was whether the Appellants and their gardener comparators had been performing work rated equivalent or greater or of equal value and whether the difference in basic pay and bonus between the Appellants and their comparators was genuinely due to a material factor not the difference in sex.

[17]In their Defence the Council contended that the claims should be struck out pursuant to EqPA Section 2(3).

The Judgment in the County Court

[18]HH Judge Owen QC dealt with a number of issues which are no longer material to this appeal. As for the issue before me, he set out in paragraph 6 of the judgment the grounds upon which the Council contended that the claims should be struck out pursuant to EqPA Section 2(3):

“That these claims should be struck out pursuant to the provisions of Section 2(3) of the Act on the basis that the entirety of the proceedings are a claim for equal pay as distinct from proceedings in which a question arises as to the operation of an equality clause and that a claim for equal pay such as the present could be more conveniently disposed by an Employment Tribunal which has available to it specialist procedures for such claims, specialist judges and particular expertise of such claims.”

[19]HH Judge Owen QC identified in paragraph 12 of his judgment the considerations he took into account in deciding whether to strike out the Appellants’ claims exercising the discretion under EqPA Section 2(3) as follows:

“Principally, in looking at the exercise of the discretion, the court will be concerned with the true construction of section 2(3) and the appropriate meaning of ‘conveniently’ in the present circumstances. It would need to consider whether, for example, if the claim, originally viable before an Employment Tribunal has been lost by reason of the time bar, whether that it fatal to the defendants’ applications as the claimants submit (essentially on the basis that it could not be convenient for the matters to be heard by an Employment Tribunal if there is, in short, nothing to be heard). Finally, what factors to cause the exercise of the discretion are in play here which would justify the court exercising its discretion in taking such a draconian step of striking out an action, and whether, in so doing, there is any breach of Article 6 of the European Convention on Human Rights, and whether that is material in the exercise of this discretion?”

[20]In paragraph 31

the Judge recorded that counsel then acting for the Appellants submitted:

“…that the proper construction of section 2(3) involves (sic) the court to focus solely on the position as it now stands, that is, when these proceedings were instituted, and in effect to look at the matter from the perspective of the claimant, and in doing that the court would be bound to conclude that it could not be convenient for the matter to be determined by an Employment Tribunal because there would be no claim to be determined.”

Judge Owen QC recorded at paragraph 32 that counsel for the Council submitted:

“…one has to construe section 2(3) objectively and that an objective construction would demonstrate that the nature of this claim is such that, viewed objectively, it would necessarily have to be determined before an Employment Tribunal, not least for the reasons submitted in both skeleton arguments which demonstrate on the one hand the total expertise available to the Employment Tribunal, its resources and the structure in place necessary to deal with such complex claims, and it might be argued on the other hand, notwithstanding what evidence there is concerning the plethora of claims over the last few years dealing with equal pay claims, what is noticeable is that there is no mention whatsoever of any recourse to the County Court for this type claim.”

The learned

Judge commented:

“Indeed, both parties have no knowledge, as I understood it, of any such claims being brought in the County Court; the obvious home for such claims would be the Employment Tribunal. As I have indicated before, the sole reason why these claims cannot be brought before an Employment Tribunal is because of the operation of the time bar.”

[21]HH

Judge Owen QC held 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 judgment, which would render an otherwise convenient method of determination being rendered inconvenient or vice versa.”

[22]It was on the basis of the conclusion reached by the learned

Judge on striking out the Claimants’ claims under Section 2(3) that he decided at paragraph 35:

“It is in these circumstances that I am driven to conclude and would find in any event under the inherent jurisdiction of the court that the claims would constitute an abuse of process. The only reason why the claim is being presented in this way is simply the fact that the time bar has operated to prevent an otherwise orthodox claim from being brought before the appropriate tribunal. There is no good reason, and no reason why in the interests of the proper administration of justice, that these stale claims should be permitted to proceed before an inappropriate venue.”

[23]As the argument developed during the hearing of the appeal before me, Mr Epstein QC rightly said that he was constrained to accept that the factors which the Judge took into account in striking out the Appellants’ claims using powers under EqPA Section 2(3) were those which he relied upon in deciding that the claims in the County Court should be struck out as an abuse of process. When making submissions on the disposal of this appeal, both parties acknowledged that if the Judge had erred in his construction and application of EqPA Section 2(3) his decision on abuse of process could not stand. I accept the submission of Mr Lynch QC for the Appellants that in giving permission to appeal only on the challenge to the interpretation of EqPA Section 2(3) Mr Justice Beatson cannot have intended the appeal to be academic. The appeal would be academic if the decision on abuse of process, founded as it is on HH Judge Owen QC’s decision on the interpretation and application of Section 2(3), were to stand. The decision on abuse of process depends upon the correctness of the Judge’s decision on Section 2(3). If the learned Judge’s decision on EqPA Section 2(3) was wrong, his decision that the Appellants’ proceedings in the County Court were an abuse of process cannot stand.

Submissions of the Parties

[24]Mr Lynch QC advanced the following propositions in support of the contention that the learned Judge was wrong to strike out under EqPA Section 2(3) the Appellants’ claims in the County Court: i) Claims for equal pay operate by modifying contracts of employment; ii) The County Court and the High Court have jurisdiction to determine contractual disputes; iii) EqPA expressly allows concurrent jurisdictions of the Employment Tribunal and the courts to hear and determine equal pay claims; iv) There are different time limits for equal pay claims brought in the Employment Tribunal and in the courts. EqPA has done nothing to alter the limitation period for bringing claims in the courts; v) EqPA gives a discretion to the courts to strike out under Section 2(3) proceedings before them if the claims can be more conventionally dealt with in the Employment Tribunal; vi) It cannot be more convenient for a claim to be heard in the Employment Tribunal if all that the Employment Tribunal could do would be to say that they could not hear it; vii) In deciding whether it is more convenient for a claim to be disposed of in the Employment Tribunal regard should be had to the particular claim. A claim should not be struck out simply because it is a standard equal pay case.

[25]In light of the judgment of the Court of Appeal in Slack and others v Cumbria County Council (Cumbria County Council v Dow (No 2))

[2009] IRLR 463

, Mr Lynch QC no longer contended that the six month time limit for bringing an equal pay claim in the Employment Tribunal is a breach of Article 6 or of EU law on equivalence. This did not affect his contention that denying claimants in the ordinary courts the usual six year limitation period for contractual claims would be inconsistent with the EU law of equivalence and

Article 6 ECHR

[26]Illustrating the contractual nature of a claim relying on the EqPA Mr Lynch QC referred to the judgment of the Employment Appeal Tribunal in Levez v TH Jennings (Harlow Pools) Ltd (No 2)

[2000] ICR 58

and Sodexo Ltd v Mrs Gutridge and others

UKEAT/0024/08/RN

on 31st July 2008.

[27]Mr Lynch drew attention to the tense used in EqPA Section 2(3). The discretion does not apply where the claim could have been disposed of in the Employment Tribunal in the past. He contended that the language of Section 2(3) did not support a construction that the legislature had in mind striking out a claim before the courts where a claim could in the past but could no longer be brought in the Employment Tribunal. The legislature is to be taken to be well aware of the different limitation periods applicable to equal pay claims in Employment Tribunals and in the courts. It cannot be taken to have envisaged that a claim could be struck out in the courts when the Employment Tribunal could not hear the case at all.

[28]Mr Lynch referred to the judgment of the Court of Appeal in Clark v University of Lincolnshire & Humberside

[2000] 1 WLR 1988

. In that case the court held that the mere fact that a claim is made in contract which would have been more conveniently dealt with by way of judicial review does not justify the striking out of the claim for breach of contract, even if that was lodged after the expiry of the standard three months time limit for judicial review. So too in these cases more would be needed to strike out the claims in contract than the fact that they were not brought in the Employment Tribunal.

[29]Mr Lynch drew attention to the language of Section 128 of the Equality Act 2010. In the re-enacted EqPA Section 2(3), the 2010 Act uses the word ‘determined’ instead of ‘disposed of’ in the phrase ‘could more conveniently’ be disposed of by an employment tribunal. He submitted that in context the two terms are indistinguishable. It would be a misuse of language to suggest that a claim can be more conveniently determined by an Employment Tribunal when it cannot be determined at all because it would be presented out of time.

[30]It was submitted on behalf of the Appellants that in deciding whether their claims could be more conveniently dealt with by an Employment Tribunal, HH Judge Owen QC erred in considering general issues regarding the hearing of equal pay claims in Employment Tribunals. Thus he took into account the expertise of Tribunals, their resources, the structure in place necessary to deal with complex claims and that there had been no mention of an equal pay claim being heard in a County Court. Mr Lynch submitted that the legislature must have been aware of all these matters when it provided for jurisdiction in both the courts and Employment Tribunals to hear claims based on an EqPA equality clause.

[31]Mr Lynch contended that in deciding whether it was more ‘convenient’ for an equal pay claim to be disposed of in an Employment Tribunal within the meaning of EqPA Section 2(3) a court must consider the facts of the particular case. Since claims based on EqPA could be brought in either the Employment Tribunal or in the courts, considerations applying generally to such claims were not such as to affect the ‘convenience’ of their being heard in the Employment Tribunal. Mr Lynch contended that the judge erred in construing Section 2(3) ‘objectively’ not taking into account sufficiently or at all the particular features of the Appellants’ cases. He submitted that there must be circumstances particular to the individual EqPA based claim to render it convenient to be heard in an Employment Tribunal. He submitted that the judge erred in failing to base his decision under EqPA Section 2(3) on the particular circumstances of the Appellants’ cases.

[32]The first five propositions advanced by Mr Lynch were uncontroversial. Mr Epstein submitted that the outcome of this appeal depends upon the proper construction and application of EqPA Section 2(3). Before HH Judge Owen QC it was contended on behalf of the Appellants that a subjective approach should be adopted to the construction of ‘convenient’: that the court should determine what was convenient having regard to the position of the Appellants as it then stood. Mr Epstein for the Council contended before HH Judge Owen QC that what was convenient should be judged objectively having regard to the type of claim and the convenient disposal of equal pay claims.

[33]Mr Epstein accepted that the two words ‘disposal’ in EqPA Section 2(3) and ‘determination’ in the equivalent provision in the Equality Act 2010 have the same meaning.

[34]For the purpose of the appeal, counsel for the Respondent summarised the advantages of hearing the Appellants’ claims before the Employment Tribunal over hearing them before the County Court in paragraph 12 of their skeleton argument:

“…the ET is an industrial jury; the ET has specialist equal pay panels, an appeal from the ET is to the Employment Appeal Tribunal (‘EAT’) and the EAT is a specialist tribunal which is also an industrial panel, whereas the appeal route from the County Court is not to the EAT; there are special ET rules relating to equal value claims; there is a provision with the EqPA and the ET Rules 2004 for the appointment of an independent expert.”

[35]It was submitted by Mr Epstein that there may be a range of issues to be determined in an equal pay complaint. At one end of the scale it may be necessary to determine whether the jobs of the Claimant and her comparator are of equal value or are rated as equivalent and whether an employer has made out a genuine material factor defence. At the other end of the scale an Employment Tribunal may have determined that the jobs of the Claimant and her comparator are of equal value and the issue to be determined by the courts may be no more that a contractual claim for arrears of pay. He suggested that the former would be more conveniently dealt with by an Employment Tribunal whereas the latter could be dealt with by the courts.

[36]Mr Epstein contended that the entirety of the Appellants’ cases before the County Court are equal pay claims. They are potentially complex since the Appellants assert that their jobs were of equal value not just rated as equivalent to those of their comparators. Accordingly the Judge was right to hold that the proceedings could be more conveniently disposed of in the Employment Tribunal.

[37]Mr Epstein submitted that once the Judge had decided, applying an objective test, that the Appellants’ claims could more conveniently be disposed of in an Employment Tribunal, the decision whether to exercise discretion to strike out the claim in the County Court was one with which this court should only interfere if he had ‘exceeded the generous ambit within which a reasonable disagreement is possible’.

[38]After the conclusion of the hearing, counsel were invited to make submissions in writing on whether any assistance on the construction of ‘could more conveniently be disposed of’ in EqPA Section 2(3) was to be derived from the judgments in Spiliada Maritime Corporation v Cansulex Ltd

[1987] AC 460

and Banco Atlantico SA v The British Bank of the Middle East

[1990] 2 Lloyd’s Reports 504

[39]Mr Epstein pointed out that Spiliada is not a case about the meaning of the word ‘conveniently’. It is about:

“the forum non conveniens principles to be applied where an application is made for a stay of proceedings brought by right in the English courts as well as the principles to be applied when an application is made for permission to serve out [of the jurisdiction] under what is now CPR 6.37.”

Mr Epstein observed:

“Lord Goff went out of his way in his speech at p478 in relation to the former type of case to eschew use of the word ‘convenient’. In respect of the latter type of case, the wording in question was that of RSC Ord 11 r4(2). That wording was simply whether “the case is a proper one for service out of the jurisdiction”

. The same is true of Banco Atlantico. It is not a case on the meaning of conveniently or its derivatives.” Mr Epstein contended that the principles expressed in Spiliada and Banco Atlantico are not of any relevance to the proper construction of EqPA Section 2(3).

[40]If contrary to the submission advanced on behalf of the Respondent, Spiliada and Banco Atlantico were held to be relevant to the construction of EqPA Section 2(3), counsel submitted that:

“…a claimant should only be permitted to avoid the well known employment tribunal time limits by bringing a claim in the court if he or she has satisfied the court that it was not unreasonable to allow those time limits to elapse. This was the test propounded in The Spiliada.”

Mr Epstein contended that the facts set out in the Appellants’ solicitor’s statement were ‘insufficient to discharge any burden of proof’.

[41]The submissions on behalf of the Appellants recognise that the issue of forum non conveniens is different from that in the cases under consideration.

[42]Mr Lynch submitted that in Spiliada the House of Lords recognised that:

“…where a Claimant proceeds as of right against a Defendant in the English Courts, that creates a greater burden on the Defendant to seek to prove that those proceedings should be stayed to allow the proceedings to take place in another jurisdiction. Hence there is a significant burden on the Defendant to show sufficient reasons why the High Court's jurisdiction should be displaced.”

Further, Mr Lynch relying on Spiliada contended that a stay of proceedings in one forum will only be permitted if there is another tribunal in which the case can be suitably tried.

[43]Mr Lynch relied upon the speech of Lord Goff in Spiliada to support the proposition that in cases where a claimant sues in England as of right:

“…it is clearly a relevant and significant consideration that, if those proceedings were stayed, the Claimant would be barred in practice from proceeding elsewhere.”

Mr Lynch contended that a:

“…dramatically different approach [was] adopted by the County Court herein to striking out these claims [than that adopted in Spiliada]. The County Court's approach was, in effect, to treat the mere fact of not having made claims in the ET as rendering the proceedings in the County Court an abuse of process.”

[44]Mr Lynch also relied upon the judgment of Bingham LJ in Banco Atlantico to emphasise the significance given to claimants being denied an alternative remedy if barred from their existing claims.

[45]Contrary to the submission on behalf of the Respondent, Mr Lynch contended that it was understandable that the Appellants did not bring claims in the Employment Tribunal. The Appellants’ witness statements show that they did not know that they could pursue equal pay claims or the applicable time limits. When they learnt that other claims had been made on similar facts they made enquiries and acted speedily in bringing proceedings in the County Court.

Discussion and Conclusion

[46]By EqPA Section 1(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.”

[47]Subject to satisfaction of certain preconditions, the effect of the equality clause is that where a woman is employed on like work, work rated as equivalent or work of equal value with that of a male comparator she will be entitled to no less favourable contractual terms than his unless the variation is genuinely due to a material factor which is not the difference in sex between her and her comparator.

[48]It is clear from the authorities that the juridical basis for the right of a claimant to equal pay pursuant to EqPA is contractual as was made clear by the Employment Appeal Tribunal in Levez and in Gutridge. In both cases the Court stated that being contractual in nature, claims for equal pay could be brought in the ordinary courts or in the Employment Tribunal. EqPA Section 2(1) enables but does not compel claimants to bring such claims before an Employment Tribunal.

[49]The general contractual jurisdiction of the High Court and the County Court is not excluded. EqPA provides for claims in respect of the operation of an equality clause to be heard in the courts. Pursuant to Section 2(3) the court has the power to refer a question as to the operation of an equality clause for determination by an Employment Tribunal as well as that of striking out claims or counterclaims in respect of such a clause where it appears to the court that they could more conveniently be disposed of separately by an employment tribunal.

[50]Although the High Court and the County Court have jurisdiction to hear and determine claims based on the operation of the statutorily implied equality clause in the contracts of employment it is most unusual for EqPA claims to be brought in the courts. Morison J observed in Levez at paragraph 21 that ‘an Equal Pay Act claim will generally be brought in an employment tribunal…’ In Gutridge the issue was when time started running for the purpose of the limitation period for equal pay claims in the employment tribunal on a transfer of an undertaking in respect of breaches of an equality clause by the transferor. Elias P observed at paragraph 56:

“(On the other hand, it seems likely that the claim could be taken in the ordinary courts for breach of contract, and there is a power for that court to transfer any issue concerning an equality clause to an employment tribunal and to stay proceedings in the interim: see section 2(3) of the Equal Pay Act. If that is so, then this debate is somewhat artificial in any event.)”

Thus, as an aside, the Employment Appeal Tribunal observed that it was likely that claims in respect of breaches of the equality clauses by the transferor could have been brought in the courts thus avoiding the debate as to whether they were out of time for proceedings in the Employment Tribunal.

[51]The forum in which a claim based on a statutory equality clause is litigated will determine the applicable limitation period. If a claim is brought after termination of employment, in a standard case pursuant to EqPA Section 2(4) and 2ZA(3) equal pay proceedings must be instituted in the Employment Tribunal before the date six months after the last day on which the woman was employed in the employment. In the courts a limitation period of six years from the date of accrual of the cause of action applies. Both in the courts and in the Employment Tribunal, pursuant to EqPA Section 2ZB, arrears of remuneration or damages may only be recovered in respect of a period starting six years before the day on which the proceedings were issued.

[52]Legislation could have but did not provide that the shorter limitation period for post termination claims for equal pay in the Employment Tribunal should also apply to such claims in the High Court or the County Court. EqPA could have but did not provide that equal pay claims raising the more complex issues of whether the jobs of a claimant and her comparator were of equal value or whether a defendant had established a GMF defence could only be commenced in the Employment Tribunal.

[53]I agree with the observations of Mr Colin Edleman QC in Abdulla in paragraphs 36 and 37 of his judgment that the power conferred on a court by the second half of EqPA Section 2(3) to refer to an Employment Tribunal a question as to the operation of an equality clause suggests that proceedings including such claims are suitable for determination in the courts. Complex as well as straightforward issues may be referred for determination by an Employment Tribunal. As the Deputy High Court Judge pointed out, if equal pay cases were to be struck out in the courts because they raised complex issues this would result in the shorter limitation period in Employment Tribunal claims applying to complex claims and the more generous six year limitation period applying to straightforward cases.

[54]The outcome of this appeal turns on the correct construction and application of the words in Section 2(3): ‘could more conveniently be disposed of separately’ by an Employment Tribunal and the proper exercise of discretion by a court to strike out an equal pay claim under that provision. Counsel did not suggest that there is any authority which would assist in the construction of the material phrase. Both parties adopted a common sense approach to its meaning.

[55]A court considering whether to strike out an equal pay claim or counterclaim under EqPA Section 2(3) engages in a two stage process. First it will decide whether the claim could more conveniently be disposed of separately by an Employment Tribunal. If the court concludes that the claim could be more conveniently disposed of separately by an Employment Tribunal it will decide whether to exercise discretion to strike out the claim.

[56]Although different in context, in my judgment assistance in the construction of the phrase ‘could be more conveniently disposed of’ in EqPA Section 2(3) may be gained from the way in which the courts have considered whether a case is a proper one for service of proceedings out of the jurisdiction and in deciding whether to stay proceedings in the English courts for forum non conveniens. In Spiliada the House of Lords considered an appeal from the setting aside of a writ to be served out of the jurisdiction pursuant to leave granted under RSC Order 11 rule 4(2). The rule provided:

“No such leave shall be granted unless it shall be made sufficiently to appear to the court that the case is a proper one for service out of the jurisdiction under the Order.”

[57]In the course of his speech Lord Goff considered the principle underpinning service out of the jurisdiction, the issue before the House, and applications for stay of proceedings for forum non conveniens. Having regard to the authorities (including in particular the Scottish authorities) Lord Goff summarised the law on stay for forum non conveniens in a number of principles. At page 476C he held:

“(a) The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice.”

Whilst at page 475B Lord Goff considered it: “…wiser to avoid the use of the word ‘convenience’ and to refer rather, as Lord Dunedin did, to the appropriate forum” that does not in my judgment prevent the application of the principle which is at the heart of the reasoning of the House of Lords in Spiliada to the construction of ‘conveniently’ in EqPA Section 2(3).

[58]In considering both cases concerning Order 11 (now CPR 6.37), of which Spiliada was one, and those of forum non conveniens which were not before the court, Lord Goff held at page 480G:

“It seems to me inevitable that the question in both groups of cases must be, at bottom, that expressed by Lord Kinnear in Sim v Robinow, 19 R 665, 668, viz. to identify the forum in which the case can be suitably tried for the interests of all the parties and for the ends of justice.”

Lord Goff cautioned against thinking that the question at issue in deciding whether a forum was ‘convenient’ was one of ‘mere practical convenience’.

[59]In Banco Atlantico the Court of Appeal considered whether the Judge had erred in granting a stay of proceedings in their country under forum non conveniens principles. The court considered that the Judge should have addressed four questions. The fourth was:

“(4) do BBME show that Sharjah is clearly a more appropriate forum than this for the determination of those issues having regard to the interests of all parties and the achievement of justice.”

Bingham LJ held at page 9 that in the context of forum non conveniens:

“A balance of convenience in favour of the foreign forum is not enough (ibid; the Spiliada [1987] AC 460 at 474 per Lord Goff of Chieveley). The interests of justice are paramount.”

[60]As for the effect of expiry of limitation periods, Lord Goff in Spiliada considered the application of the principle of forum non conveniens where proceedings have been started in England within time but the claim is time barred in the more appropriate jurisdiction. He held at page 483F:

“Now, to take some extreme examples, suppose that the plaintiff allowed the limitation period to elapse in the appropriate jurisdiction, and came here simply because he wanted to take advantage of a more generous time bar applicable in this country; or suppose that it was obvious that the plaintiff should have commenced proceedings in the appropriate jurisdiction, and yet he did not trouble to issue a protective writ there; in cases such as these, I cannot see that the court should hesitate to stay the proceedings in this country, even though the effect would be that the plaintiff's claim would inevitably be defeated by a plea of the time bar in the appropriate jurisdiction. Indeed a strong theoretical argument can be advanced for the proposition that, if there is another clearly more appropriate forum for the trial of the action, a stay should generally be granted even though the plaintiff's action would be time barred there. But, in my opinion, this is a case where practical justice should be done. And practical justice demands that, if the court considers that the plaintiff acted reasonably in commencing proceedings in this country, and that, although it appears that (putting on one side the time bar point) the appropriate forum for the trial of the action is elsewhere than England, the plaintiff did not act unreasonably in failing to commence proceedings (for example, by issuing a protective writ) in that jurisdiction within the limitation period applicable there, it would not, I think, be just to deprive the plaintiff of the benefit of having started proceedings within the limitation period applicable in this country. This approach is consistent with that of Sheen J. in The Blue Wave [1982] 1 Lloyd's Rep. 151. It is not to be forgotten that, by making its jurisdiction available to the plaintiff - even the discretionary jurisdiction under R.S.C., Ord. 11 - the courts of this country have provided the plaintiff with an opportunity to start proceedings here; accordingly, if justice demands, the court should not deprive the plaintiff of the benefit of having complied with the time bar in this country. Furthermore, as the applicable principles become more clearly established and better known, it will, I suspect, become increasingly difficult for plaintiffs to prove lack of negligence in this respect.”

[61]Lord Goff referred to the need to do practical justice. Practical justice demanded that if the claimant did not act unreasonably in failing to commence proceedings in the more appropriate jurisdiction within the applicable limitation period it would not be just to deprive him of the benefit of starting proceedings within the limitation period in another jurisdiction.

[62]The Court of Appeal in Clark considered the effect on a permissible choice of contract rather than judicial review proceedings of the different time limits applicable to each. Ms Clark challenged the decision of the University of Lincolnshire and Humberside that she had plagiarised material for her final examinations. The University sought to strike out her claim in contract. The claim was struck out in the County Court but restored in the Court of Appeal. Sedley LJ held at page 1994 C-D:

“…the CPR 1998 enabled the court to prevent the unfair exploitation of the longer limitation period for civil suits than for judicial review; that the court could strike out an action, notwithstanding the currency of the limitation period, if the entirety of circumstances, including the availability of judicial review, demonstrated that the court's processes were being misused or if it was clear that because of the lapse of time or other circumstances no worthwhile relief could be expected.”

Thus if County Court proceedings are being abused they can be struck out.

[63]It is clear from paragraph 33 of his judgment that HH Judge Owen QC reached his conclusion that ‘this is a claim, viewed objectively, which would be determined conveniently by an Employment Tribunal and not by a County Court’ on the basis that in general equal pay claims are more conveniently dealt with in Employment Tribunals.

[64]The learned Judge did not consider which issues in the proceedings before him were likely to be contentious and in which forum those would be best resolved bearing in mind the power of the court to refer an issue for determination to an Employment Tribunal if particular expertise or procedures were needed.

[65]In my judgment EqPA Section 2(3) required a consideration of the convenience of disposal of the particular cases before the court. The legislature had already determined that equal pay claims may be disposed of either in the courts or in the Employment Tribunal.

[66]The principle formulated by Lord Goff in Spiliada in relation to what is now CPR 6.37 and to forum non conveniens provides useful guidance to the proper construction and application of EqPA Section 2(3). The court will consider whether the Employment Tribunal is the more appropriate forum for the claim to be tried. In other words would the claim be tried more suitably in the Employment Tribunal in the interests of the parties and the ends of justice.

[67]Consideration must be given to the facts and circumstances of the particular proceedings and claims before the court. I do not accept the submission made on behalf of the Respondent that a distinction is to be drawn between court proceedings of which an equal pay claim forms one part and those in which there is no other claim and that necessarily the latter are more conveniently disposed of in an Employment Tribunal.

[68]Proceedings based on an equality clause are based on claims for breach of contract. The appropriateness of disposal of an equal pay claim in an Employment Tribunal in my judgment is not determined by whether other claims are included in the proceedings. However the fact that the only claim in court proceedings is for equal pay is a factor which could be taken into account in determining the questions posed by Section 2(3): whether the proceedings could more conveniently be disposed of separately by an Employment Tribunal and if so whether discretion should be exercised to strike them out.

[69]The Judge decided that ‘viewed objectively’ ‘the claim’ would be determined conveniently by an Employment Tribunal. The only ‘objective’ factors referred to in the judgment were those relied upon by the Respondent set out in paragraph 32, in paragraph 20 of this judgment and were general features of the determination of equal pay claims in Employment Tribunals. In my judgment the learned Judge erred in failing to consider whether the particular claims before him could more appropriately be disposed of before an Employment Tribunal.

[70]The Judge considered whether the fact that proceedings in the Employment Tribunal would be time barred affected his decision that the Appellants’ claims would be more conveniently disposed of by an Employment Tribunal. It seems that he took this matter into account in determining convenience of forum rather than as affecting the exercise of discretion to strike out the Claimant’s claims. He held at paragraph 33 that the time bar “…is not a fact, in my judgment, which would render an otherwise convenient method of determination being rendered inconvenient or vice versa.”

[71]The observations of Lord Goff in Spiliada at page 483G that there was: “…a strong theoretical argument can be advanced for the proposition that, if there is another clearly more appropriate forum for the trial of the action, a stay should generally be granted even though the plaintiff's action would be time barred there” is apposite. I therefore do not accept Mr Lynch’s proposition that the claims of the Appellants cannot be more conveniently disposed of in the Employment Tribunal because due to the expiry of the applicable limitation period they could only be struck out in that forum.

[72]In my judgment the inability of the Appellants to commence proceedings before an Employment Tribunal could be a factor affecting the convenience of the Tribunal as a forum for equal pay claims or one affecting the Judge’s discretionary decision to strike out such claims in the County Court. Whether that factor is taken into account in determining whether the equal pay claims can be more conveniently disposed of in the Employment Tribunal or if such a conclusion is reached on other grounds, in deciding whether to strike out the claims, in my judgment the reasons why proceedings had not been issued in the Employment Tribunal in time would be relevant to the decision under EqPA Section 2(3).

[73]Mr Epstein contended that it cannot be assumed that the Judge failed to take into account the facts of the particular case before him. However the Judge made no reference in his judgment to the evidence before him as to the reason why the Appellants did not commence proceedings in the Employment Tribunal within the limitation period for doing so.

[74]It was said by their solicitor in his statement before the County Court that each of the 14 Appellants was unaware of the disparity between their pay and that of their comparators. He explained that the Appellants came forward as a result of an advertisement which his firm placed in a local newspaper on 18th August 2008 following a successful equal pay claim. Their claims to the Employment Tribunal were by then well out of time.

[75]The reasonableness of the Appellants in not pursuing timely applications to an Employment Tribunal is challenged by the Respondent.

[76]There are issues of fact or interpretation of evidence between the parties as to whether and when the Appellants knew or ought to have known that they could bring equal pay claims before an Employment Tribunal. No findings of fact were made in the proceedings in the County Court to enable an assessment to be made of whether the Appellants acted reasonably in not commencing proceedings in the Employment Tribunal even if it were more convenient for their claims to be heard there.

[77]In a case in which the Respondent was contending that the only reason proceedings were brought in the County Court was that the limitation period for bringing proceedings before an Employment Tribunal had expired, in my judgment the Judge erred in failing to make findings as to the reason the Appellants did not issue timely proceedings in the Employment Tribunal and whether they acted reasonably in failing to do so.

[78]Claimants cannot rely on letting the limitation period for claims to an Employment Tribunal go by in order to ensure that their equal pay claims are heard in the courts. It cannot be said that because such claims to an Employment Tribunal would be out of time a judge could not decide that it would be more convenient for them to be disposed of in the Employment Tribunal and to strike out the claims in the County Court or High Court. In my judgment applying the approach of Lord Goff in Spiliada practical justice would require the reason for not commencing Employment Tribunal proceedings to be taken into account. If not presenting such proceedings was reasonable, the interests of justice are likely to be served by enabling claimants to continue litigating in a forum which has jurisdiction to hear their claims. Such considerations could affect the decision as to whether the claims could be more conveniently disposed of in the Employment Tribunal or, if a judge so concluded, whether discretion should be exercised to strike out the claims in the County Court.

[79]In my judgment the learned Judge in the cases under appeal erred in his construction and application of the power to strike out proceedings under EqPA Section 2(3) and therefore in his decision to strike out the Appellants’ claims.

[80]Since the decision that the Appellants’ claims constituted an abuse of process was based on the erroneous reasoning in interpreting and applying EqPA Section 2(3) it cannot stand.

Disposal

[81]The appeal is allowed. The decision to strike out the Appellants’ claims before the County Court under Equal Pay Act 1970 Section 2(3) is set aside.

[82]If and insofar as the Judge decided to strike out the Appellants’ claims as an abuse of process that decision too is set aside.

[83]This judgment does not preclude the Respondent from renewing its application to the County Court to strike out the Appellants’ claims.