Joint Committee on Statutory Instruments Thirtieth Report


2 S.I. 2003/1656: unexpected use of enabling power

Equal Pay Act 1970 (Amendment) Regulations 2003 (S.I. 2003/1656)

2.1 The Committee draws the special attention of both Houses to these Regulations on the ground that in one respect they make an unexpected use of the enabling power.

2.2 These Regulations amend the Equal Pay Act 1970 in two respects to give effect to Article 141 of the Treaty of Rome, as interpreted and applied in certain cases before the European Court of Justice and domestic courts. They amend the time limit within which a claim under the Act must be brought before an employment tribunal and the period in respect of which a tribunal or court may award arrears of pay or damages under the Act. Prior to these Regulations the Act provided that a claim under the Act in an employment tribunal had to be brought within 6 months of the end of the contract of employment (section 2(4)). In a case where the employee had a succession of contracts in respect of the same employment this meant that the 6 month time limit applied from the end of each contract. The maximum period set by the Act in respect of which arrears of pay or damages could be recovered was 2 years (section 2(5)).

2.3 In its decision in Preston & Others v. Wolverhampton Health Care NHS Trust & Others[5] the House of Lords (following a ruling in the European Court of Justice) held that where contracts are concluded at regular intervals in respect of the same employment in a stable employment relationship, the limitation period in section 2(4) runs from the end of the last contract falling within the relationship, so that the employer in such cases cannot require the limitation period to be applied to each contract within the relationship but only to the final one.

2.4 The Regulations give effect to this decision by substituting (in regulation 3(2)) a new section 2(4) and introducing (in regulation 4) a new section 2ZA which refers to this type of case as a 'stable employment case' (the statutory definition is in new section 2ZA(2) of the Act). In such cases the time limit, set out in new section 2ZA(4), is 6 months from the day on which the relationship ended. The Regulations also amend the period for which arrears of pay or damages may be recovered by extending it (so far as relevant for present purposes) to 6 years (new section 2ZB(3) introduced by regulation 5).

2.5 Regulation 2 sets out how the new provisions are to apply. Paragraph (2) prevents new sections 2(4) and 2ZA from applying in respect of contracts which ended more than 6 months before 19 July 2003 (the date on which the Regulations came into force). Paragraphs (3) and (4) provide that where a claim in a stable employment case can be brought under new sections 2(4) and 2ZA a tribunal may not award arrears of pay or damages in respect of a contract of employment which ended more than 6 months before 19 July 2003.

2.6 It appeared to the Committee that in a case to which regulation 2(3) and (4) applies (that is, a claim in respect of a stable employment relationship which ended not more than 6 months before 19 July 2003) the claim relates to all the contracts falling within the stable employment relationship (since, as held in the Preston case, no separate time limit applies in respect of the contracts preceding the last) and that in principle such a case might be expected to fall within the new provisions in the same way that a claim relating to a single contract of employment of the same duration as the stable employment relationship would. In its second memorandum, printed in Appendix 2, the Department of Trade and Industry states that the legal situation immediately before the Regulations came into force was that a person in a stable employment relationship wishing to complain about a provision in a contract that had expired more than 6 months previously was subject to a crystallised time bar under section 2(4) of the Act; that a person could nevertheless rely on article 141 of the Treaty and the House of Lords decision in Preston to overcome that time bar; and that this position remains unchanged after the Regulations came into force.

2.7 In the Committee's view this argument does not address the problem effectively. The position in a stable employment case immediately before the Regulations came into force was that a claim could be brought in respect of the whole period of the relationship if it was instituted within 6 months of the end of the last contract in the relationship. That was the effect of the decision in Preston. The Committee does not therefore agree with the Department that section 2(4) operated in such circumstances to crystallise a time bar in respect of all the contracts within the relationship which ended more than 6 months before the proceedings were brought.

2.8 That being so, the effect produced by regulation 2(3) and (4) appears on the face of it to be anomalous. A claimant under the Act before these amendments could claim in respect of all the contracts falling within the stable employment relationship (provided the claim was brought within 6 months of the end of the last one) and could recover arrears of pay or damages for a period of up to 2 years. The effect of regulation 2(3) and (4) is to exclude recovery in respect of the period covered by any contract falling within the relationship which ended more than 6 months before 19 July 2003. The extent to which recovery in respect of past contracts is excluded will thus depend on their duration in the particular case. For instance, if a woman in a stable employment relationship containing 3 one -year contracts the last of which ended on 31 March 2003 brought a claim within 6 months of that date, regulation 2(3) and (4) would have the effect of limiting the award of arrears of pay or damages to the period covered by the last contract. Yet, had the Regulations not been made she could have been awarded arrears for a period of at least 2 years.

2.9 The Department points out that the Regulations do not affect employees' rights under Community law. In practice therefore the effects of the Regulations will need to be modified by tribunals to the extent that they are incompatible with Community law. It seems to the Committee to be an unexpected use of the enabling power to include in Regulations provisions whose effects may need to be modified in practice to give effect to requirements of Community law. This is especially so in the case of Regulations which are intended to implement those very requirements.

2.10 The Committee accordingly reports regulation 2(3) and (4) for making an unexpected use of the enabling power.


5   [2001] 2 WLR 448. Back


 
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