Slack v Cumbria County Council

This Court considered when the six‑month time limit for presenting an equal pay claim under the Equal Pay Act 1970 (as amended) begins to run. The court held that, as a general rule, the time limit is triggered by the termination of the particular contract of employment which contains the equality clause, but that the statutory "stable employment" exception in section 2ZA(2) applies where there is a succession of contracts forming a stable employment relationship so that time runs from the end of the final contract in that relationship. The court held that signed contractual documents stating they "supersede any previous contract" will ordinarily be effective to create a new contract, and that objective contractual intention determined by the express terms is decisive where documents are unambiguous.

The court applied EC law principles embodied in Article 141 and the Court of Justice's ruling in Preston, and recognised that the 2003 Regulations implementing amendments to section 2 of the 1970 Act addressed the compatibility concerns identified by the Court of Justice. On the facts the appeals of Mrs Slack and Mrs Elliott succeeded under the stable employment exception; Mrs Athersmith's case was remitted to the employment tribunal for further factual findings on whether her relationship was stable employment.

Background and procedural history:

• These appeals arose from a group of representative equal pay claims brought by female employees of Cumbria County Council. The employment tribunal (ET) in December 2005 found for most claimants on the question whether changes in terms were variations of continuing contracts or termination and substitution by new contracts. The Employment Appeal Tribunal (EAT) reversed in part, holding that where employees signed new contractual documents stating they superseded earlier contracts, new contracts were formed and time for equal pay claims ran from the end of those contracts. The claimants appealed to this Court. The Equality and Human Rights Commission intervened and advanced additional EC law arguments.

Nature of the claim and relief sought:

• The claimants sought ET determinations of equal pay breaches and recovery of arrears. Central to the appeals was whether equal pay claims were time barred because the six‑month limitation in section 2(4) (as amended by the 2003 Regulations and implemented in section 2ZA) ran from the end of an earlier contract rather than from the end of the final contract in a series.

Issues framed:

• Whether the employer and employee had objectively agreed to terminate the prior contract and create a new contract (the New Contract Point).
• Whether an "overriding" or umbrella contract could be implied so that time would run only on termination of the employment relationship (the Overriding Contract Point).
• Whether, as a matter of domestic and EC law, time should be treated as running from the end of the final contract in a series or from the end of each contract (the Final Contract/Powerhouse Points), and whether the "stable employment" exception in section 2ZA(2) applied.
• Whether the EAT’s contractual approach produced incompatibility with Article 141 and EC principles of effectiveness, equivalence, clarity and certainty.

Court’s reasoning and conclusions:

• The court held that where an employee signs comprehensive, unambiguous contract documentation stating it supersedes previous contracts, those documents will ordinarily give rise to new binding contracts; the objective intention expressed in the documents is decisive. Thus the EAT was correct in principle to give effect to express terms effecting a new contract.
• However, the court accepted that, under EC law as explained in Preston and implemented by the 2003 Regulations, the statutory "stable employment" exception must be applied where a succession of contracts nonetheless constitutes a stable employment relationship; in that situation the qualifying date runs from the end of the final contract in the stable relationship. The stable employment concept was not confined to cases with breaks between contracts and can apply a fortiori to uninterrupted successions of contracts covering the same work.
• Applying those principles, the court concluded that on the facts as found by the ET the relationships of Mrs Slack and Mrs Elliott were stable employment and their claims were therefore presented in time; the ET decisions in their favour were reinstated (for different reasoning). Mrs Athersmith’s factual circumstances were insufficiently proved on the record to determine whether she too fell within the stable employment exception; her appeal was allowed in the sense that her case was remitted to the ET for further factual inquiry on the stable employment question.
• The Court also concluded that, in substance, domestic law is compatible with EC law because the Court of Justice’s Preston ruling and the 2003 Regulations address the incompatibility concerns and provide the appropriate mechanism (section 2ZA) to protect claimants in stable employment relationships.

Wider context and implication:

• The court noted the procedural importance of resolving these issues given the large number of similar claims and the public interest in achieving finality and consistent application of the law.

Appeals allowed in part. The court held that express signed contractual documents stating they supersede previous contracts will ordinarily create new contracts and trigger the six‑month time limit in respect of the contract so ended, but that the stable employment exception in section 2ZA(2) (reflecting the Court of Justice’s ruling in Preston and implemented by the 2003 Regulations) applies where a succession of contracts forms a stable employment relationship so that time runs from the end of the final contract. Applying that exception, the ET’s decisions for Mrs Slack and Mrs Elliott were reinstated; Mrs Athersmith’s matter was remitted to the ET for factual findings on whether she was in a stable employment relationship.

This is an appeal from decisions of the Employment Appeal Tribunal (UKEAT/1048/06/MAA) reversing aspects of the ET’s 21 December 2005 sample‑case determinations. The Court of Appeal ([2009] EWCA Civ 293) allowed the appeals in part and remitted one matter to the ET for further factual inquiry.