Employment Matters - December 2018
DAC Beachcroft's Employment Matters December 2018 focuses on some of the most interesting cases and events occurring within the Employment Law sector.
Published 6 December 2018
Equal pay legislation requires employees to issue claims within six months of the end of employment. However, if the employee has been employed under multiple contracts, they do not need to bring a claim at the end of each contract, provided they were in a “stable working relationship” throughout the time. The time limit will only start to run at the end of the stable working relationship. In this case, the EAT examined whether an employee’s promotion would put an end to the stable working relationship.
Ms Barnard was employed by Hampshire Fire and Rescue. She changed role 4 times during her employment: these changes included promotions. She brought an equal pay claim relating to the entirety of her employment. The employment tribunal had to decide, as a preliminary point, whether any part of the claim was out of time. It held that there had been significant differences in pay and responsibilities when she had changed roles on two occasions, and that, when this had happened, there had been an end to the stable working relationship. The equal pay claims relating to all but the last of her two roles were therefore, according to the tribunal, out of time.
Ms Barnard appealed to the EAT.
The EAT reviewed the authorities on the concept of a stable working relationship. These cases set out that tribunals should apply a non-technical, broad-brush test, examining the character, nature or type of work and the employment relationship in practical terms to determine whether there is an unbroken stable relationship. The EAT considered how this should be done. It said that the tribunal had considered Ms Barnard’s arguments only briefly, with very limited analysis, and a lack of explanation as to why it considered the nature and changes to her work were “significant changes”, and why the term “significant” formed the basis of the test, when its reasons had referred to “fundamental” and “radical” changes. The EAT also commented that there was force in the argument that Ms George should not have been prevented from bringing an equal pay case simply because she had been promoted, particularly given that the changes to salary and responsibilities were relatively modest. It said that it was surprising that the concept of a stable working relationship, which was originally devised to assist women in being able to pursue equal pay claims, had had the opposite effect in this case, and that it was difficult to see from case law what the justification for this could be.
The EAT said that it could see no reason why a promotion or change in role within the same organisation could not amount to something short of the kind of change (“radical”, “significant” or “fundamental”) that would bring a stable working relationship to an end.
The EAT found that the tribunal’s decision was perverse, and remitted the case to a fresh tribunal.
Employees who bring successful equal pay claims can recover arrears of pay dating back six years from the date of the claim. In large multiple equal pay claims, in particular, the financial consequences for the employer can be severe, so employers are often ingenious in constructing arguments to limit the damage. One of these arguments is that, if an employee has held several successive contracts during the six-year back pay period, the equal pay claim should only 'bite' on the most recent contract, thus potentially reducing the value of the claim substantially if that contract is relatively recent. This case indicates that the scope for such arguments is fairly limited in practice. The current spate of activity in the appeal courts in equal pay cases in the retail sector suggests that this issue may well be revisited in the coming years.