The Supreme Court has ruled that equal pay claims can be brought through civil courts rather than employment tribunals, which will extend the time limit to make a claim from six months to six years.
Birmingham City Council, the employer at the centre of the case, appealed to the Supreme Court against an original decision from the High Court and the Court of Appeal, which both stated that workers could bring equal pay compensation claims through employment tribunals and the High Court.
The extended time limit could open employers up to a risk of significant costs from former employees making back-dated claims on equal pay.
Caroline Carter, head of employment law at Ashurst, said: “The decision raises significant concerns for employers and goes to the heart of their risk management strategies and budgets for equal pay claims.
“Employees now have much longer to bring their claim and it opens the floodgates for opportunistic employees to ‘forum shop’.
“Equal pay claims have been on the rise in recent years, in both the public and private sector, and are now set to increase dramatically.”
Claimants will be entitled to equalised pay going forward and also to arrears for equal pay of up to six years.
Sarah Ozanne, an employment partner at law firm CMS Cameron McKenna, added: “This is a significant development in current equal pay laws, and leaves employers open to the threat of claims long after the employment relationship has ended.”
Leigh Day and Co, the law firm representing 174 claimants in the equal pay case against Birmingham City Council, said that the judgment is the biggest change to equal pay legislation since its introduction in 1970.