North Cumbria University Hospitals NHS Trust v Fox & Ors

For limitation purposes under the Equal Pay Act 1970, a stable employment relationship is assessed in practical terms. It is not confined to successive short-term or intermittent contracts, and it may exist where contracts succeed one another without a break or where contractual terms change substantially. The central questions are whether the employee continues in the same work and whether the employment relationship remains stable. Changes in contractual terms, including pay progression, do not themselves end that relationship. Where stability continues, the qualifying date runs from the end of the stable relationship, not from the end of an earlier contract.

The Trust appealed from an Employment Appeal Tribunal decision allowing the nurses’ appeal from an Employment Tribunal pre-hearing review and remitting their equal pay claims. The Employment Tribunal had held that the introduction of Agenda for Change created new contracts, potentially making applications to add comparators out of time. The EAT disagreed and held that the existing contracts had been varied. In the Court of Appeal, the claimants relied on the stable employment relationship provisions in section 2ZA of the Equal Pay Act 1970. The central issue was whether the new terms interrupted a stable employment relationship despite continuity of work and contracts.

1. Disposition. The appeal was dismissed and the EAT’s decision was upheld. The court did not need to decide whether Agenda for Change terminated the existing contracts or merely varied them. Carnwath LJ gave the principal judgment; Smith LJ and Rimer LJ agreed.
2. Statutory and European context. Section 2ZA of the Equal Pay Act 1970 creates a stable employment relationship case. Its qualifying date is six months after the stable employment relationship ends, even where a contract has ended and no further contract is in force. The provision was introduced by the Equal Pay Act 1970 (Amendment) Regulations 2003 under section 2(2) of the European Communities Act 1972. Its European roots, including the equal pay obligation in Article 141 of the Rome Treaty, were therefore relevant. A significant divergence from that obligation could raise a question about the validity of the regulations.
3. Meaning of stable employment. The Court of Appeal was bound by Slack v Cumbria CC [2009] IRLR 463, which correctly gave the phrase a wider construction. It is not confined to successive short-term or intermittent contracts, or to cases involving gaps between contracts. Long-term successive contracts and an uninterrupted succession of contracts may qualify. The inquiry is broad, non-technical and practical. Employment refers to the nature of the work or job, rather than the legal form of the contracts. An umbrella contract or mutual obligation to renew is not required. Contractual terms matter only so far as they illuminate the stability of the relationship.
4. Application. The nurses continued doing the same work for the Trust, without a break in the work or in the succession of contracts. The changes to pay, progression, allowances and other conditions, including the Knowledge and Skills Framework, did not create a practical break in those employment relationships. The stable employment relationship therefore continued. The limitation question could be resolved by reference to section 2ZA without the detailed contractual analysis undertaken by the tribunals.
5. Guidance. Smith LJ observed that the stable employment inquiry should ordinarily provide a straightforward route for tribunals and save the time and cost involved in deciding whether contractual changes were fundamental or merely variations.

1. Court of Appeal (Civil Division). Dismissed the Trust’s appeal and upheld the EAT’s decision: [2010] EWCA Civ 729.
2. Employment Appeal Tribunal. Allowed the claimants’ appeal from the Employment Tribunal and remitted the limitation and amendment issue, holding that the contractual changes had not created new contracts: [2009] UKEAT 0385_08_2404.
3. Employment Tribunal. On a pre-hearing review, held that Agenda for Change had rescinded the earlier contracts and created new contracts.