Slack and others v Cumbria County Council (intervener Equality and Human Rights Commission) [2009] EWCA Civ 293 CA

equal pay | time limits and arrears | contract variation

The Court of Appeal has held that employees whose contract had been varied were employed in a stable employment relationship. The change to their terms did not have the effect of triggering the time limit for equal pay claims. Therefore their claims were in time.

Female employees and ex-employees lodged equal pay claims against Cumbria County Council. The terms of many of the employees' contracts had been altered at some stage during their overall period of employment. The employees in this case were part of a group of claims selected for the determination of the issues of time limits for bringing claims and arrears payable for successful claims. In a "standard case" the time limit for bringing an equal pay claim is normally six months from the end of employment. Following amendments to the Equal Pay Act 1970 by the Equal Pay Act 1970 (Amendment) Regulations 2003 (SI 2003/1656), s.2ZA of the Act clarifies that where someone is employed on a series of contracts within a "stable employment relationship" the time limit runs from the end of the stable employment relationship. Under s.2ZB, in England and Wales the normal limit on arrears of pay that may be awarded in a standard case is six years before the date on which the proceedings were instituted. The council argued that the changes to working arrangements resulted in the termination of the original contract and the commencement of a new one. If the council was successful in this argument, arrears to successful claimants would be limited to the period of the final contract. The council also argued that in some cases ex-employees' claims were time-barred.

During the course of their employment with the council Mrs Slack and Mrs Elliott's hours were varied by agreement although they remained in the same employment with unchanged terms and conditions. They signed a contract that purported to supersede any previous contract. Mrs Athersmith transferred from a relief to permanent position in the same employment, which resulted in a change in status and an entitlement to occupational sick pay. She signed a similar contract to that of Mrs Slack and Mrs Elliott. All three women had continuous service with the council. In Mrs Slack and Mrs Elliott's case the tribunal held that there had been only one employment throughout, but for Mrs Athersmith a new contract had been formed when she became permanent. Therefore she was time barred. On the council and Mrs Athersmith's appeals, the Employment Appeal Tribunal (EAT) agreed with the council, holding that the express contractual term, that the new contract superseded the old, determined the matter.

The employees appealed to the Court of Appeal arguing that there had been only variation to their contracts, and that they had had only one employment with the council. The express term of the contracts was only one point to be taken into account. The Court of Appeal referred to this as the "new contract point". The employees also argued that even if there were new contracts there was an "overriding contract" governing the employment relationship. Therefore time would start to run from the end of the last contract in the series.

The Equality and Human Rights Commission (EHRC) intervened in the case, arguing a "final contract point" that, to comply with EC law on equal pay, the time limit should not be triggered until the expiry of the final contract where there was a succession of contracts with the same employer for substantially the same work. The EHRC also sought to develop the "stable employment" point that, to comply with EC law, where a contract is terminated but employment continues under another for substantially the same work this should be regarded as "stable employment" as interpreted by the European Court of Justice (ECJ) in Preston and others v Wolverhampton Healthcare NHS Trust and others [2000] IRLR 506 ECJ and subsequently set out in s.2ZA. Although it was accepted by the employees and the council in the tribunal and the EAT that the claims were "standard cases" the EHRC argued that the exception from the standard case, made for stable employments, applied. The EHRC contended that the EAT decision raised issues of incompatibility with EC law and the right to equal pay under Article 141. Requiring claimants to issue proceedings within six months of a contract ending, even where a new contract followed it, would deprive them of the right to equal pay for the whole or most of the period of relevant work. This went against the ECJ ruling in Preston.

On the "new contract" and "final contract" points the Court of Appeal held that it was clear that one contract had been terminated and replaced with another. Therefore if the claims were treated as standard cases, they were time barred in respect of periods prior to the new contracts. The Court of Appeal also held that there was insufficient evidence in the tribunal to imply an overriding contract. Instead it held that the concept of a stable employment relationship applied in the case of Mrs Slack and Mrs Elliott. They did the same work over a number of years without a break in the work or succession of contracts. Therefore their claims were in time. In Mrs Athersmith's case there was insufficient evidence to say whether or not there was a stable employment relationship.

The Court of Appeal also held that there is no incompatibility between domestic law and EC law in relation to the six-month time limit. The 2003 Regulations met any objections on incompatibility identified by the ECJ in Preston by making provision for time limits in stable employment cases. Where there was more than one contract it was not necessary for domestic law to take the final contract in a series as the trigger point for the time limit or treat successive contracts as a single and continuous contract. If Mrs Athersmith's case fell on the time limit issue this would be because she could not show a stable economic relationship, not because the time limit provisions breached EC law. The appeals were allowed and Mrs Atherton's case was referred back to the tribunal to establish whether or not her employment was stable employment under s.2ZA.

Case transcript of Slack and others v Cumbria County Council (intervener Equality and Human Rights Commission) (on the BAILII website)

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