The cost of equal pay
6 March 2008

The cost of equal pay

The cost of equal pay

A welter of equal pay claims has piled the pressure on the public sector legal system, but reforming the way tribunals work could ease the problem

Over the past few years, equal pay claims have presented one of the greatest legal challenges to the public sector. Indeed, the greatest increase in employment law caseload has come in the area of equal pay and the greatest proportion of these cases have been launched in the public sector.

There was a 154 per cent increase in equal pay claims between 2005-06 and 2006-07, and some 15,000 claims on behalf of local government workers have been processed by the Newcastle employment tribunal region alone.

To have several mass equal pay cases going on at the same time poses particular logistical problems for the tribunals, both in accommodating all the claims (including equal value experts) and in dealing with a large number of appeals proceeding at different paces. Indeed, the outgoing chair of the Equal Opportunities Commission recently suggested that tribunals were not fit for purpose in this respect and that there should be some form of moratorium on new claims - although it is difficult to see how this would be compatible with European law. So what practical changes might be made to speed up the system?

The problem

The major problem with series of individual cases is that they regulate purely those cases and do not allow a wider picture to be considered. Therefore, the only way to redress inequality of pay in the public sector at present is on a case by case basis. A single case or series of cases may have little effect on a pay system, which means that many claims have to be brought (and in these local authority cases there is often wave after wave of cases).

One possible radical solution is to give the tribunals the power to order an equal pay audit if employees lose a case. This might be required to be carried out by the employer across the whole of its operations or in a particular section in which pay discrimination has been found.

In addition to substantive changes in the law the tribunal procedures could also benefit from overhaul. The tribunals' 2004 rules of procedure make no special provision for dealing with mass litigation. Also the statutory dispute resolution procedures are clearly unsuited to complex mass litigation. A class action system, like that of the US, has also been suggested as a solution to the flood of equal pay claims affecting the public sector.

Essentially this means that instead of a single claimant pursuing a single claim, a test claimant or group could bring claims on behalf of specified or unspecified claimants, and those unspecified anonymous claimants could move straight to a remedy claim if the general action was successful. This would have the effect of vastly increasing liability on respondents. It is also unclear how this would differ greatly from the present system where, in effect, claimants represent a single group.

The solutions

There are other practical steps not requiring legislation that might be taken to clear up some of the logjam without such radical measure.

The appointment of many more independent experts onto the Advisory, Conciliation and Arbitration Service panel would help. At present equal value claims are taking much longer than they should simply because of the lack of such experts.

Special claim forms adapted for equal pay cases should be introduced, including the most important information, which now requires case management discussions to obtain. There is also a need for the claimants' solicitors to provide standard spreadsheets to the tribunal setting out such matters as the names of the claimant and comparators, the amounts earned and the precise live bonuses about which the complaint is made at an early stage.

The system should recognise that case management in these mass claims (often upwards of 1,000 claimants) is like chalk and cheese to the single unfair dismissal claim with which the tribunals are most familiar. In mass cases the tribunals should hold regular hearings to review progress and to check on time limits. Indeed, information might be given to parties (and there are often several different sets of representatives) in regular emailed updates. This would enable tribunals to more easily pick up if deadlines are being missed, which is one of the great problems in structuring mass litigation of this sort. More adventurous use of costs awards should be encouraged to penalise the missing of deadlines.

Cut-off points for claims as occurs in Group Litigation Orders in the civil courts could be introduced. This might apply by reference to an announcement in a local newspaper that unless claims are brought by a certain date they will not be permitted to join a particular multiple (although they might join the next). One of the problems in structuring litigation at present is that there are unpredictable waves of claims proceeding against the same authority at different times.

The live issues in the cases should be formulated at an early stage and regularly reviewed. If possible, issues should be set out clearly on a national basis and those matters tried in one or two cases with others stayed. This has been happening in the National Health Service litigation but not much in the local government litigation (save as to male contingent claims). The President of Employment Tribunals or Regional Chairs should seek to spot issues in cases that present in a similar way so that certain issues may be adjudicated and other cases raising the same problems should be stayed. Clearly there must be a mechanism for parties to give sufficient information to the President or Regional Chairs so that this process may take place.

One major problem in many equal pay cases involving the public sector is the wide range of comparators named by claimants (as many as ten each in cases in which we have been involved). Although there are judicial dicta calling for some restriction on the number of comparators, this rarely happens in practice. There is no reason in principle why there should not be a limit in the number of comparators, save on special application to the tribunal.

Honore de Balzac once remarked: "Equality may perhaps be a right, but no power on earth can ever turn it into a fact." That may be a sentiment one can direct at the Equal Pay Act in the public sector. The question is whether the procedures can be made more fit for purpose to do so.

John Bowers QC and Seamus Sweeney are barristers at Littleton Chambers and Park Lane Plowden Chambers respectively.