The Court of Appeal in Graysons Restaurants v Jones  EWCA Civ 725 [see here] considered whether claims for equal pay fell within “arrears of pay” payable under Part XII of the Employment Rights Act 1996 from the national insurance fund in the event of an employer’s insolvency. The question arose in the context of multiple equal pay claims brought initially against Liverpool City Council by catering assistants, a predominantly female workforce, who compared themselves with predominantly male workgroups including grave diggers and refuse collectors. Following outsourcing their employment was transferred through a number of private companies, and ultimately to Graysons Restaurants from a company that had entered administration.
If equal pay claims were included in “arrears of pay” liability for 8 weeks pay would not transfer to Graysons, but would instead be covered by the Secretary of State through the national insurance fund. If equal pay claims were not, the employees could maintain the whole of their equal pay claims against Graysons without making a separate national insurance fund claim.
The Court of Appeal held that equal pay claims were “arrears of pay” and therefore fell within the scope of a claim under Part XII of the Employment Rights Act 1996 in the event of an employer insolvency.
Katherine Apps represented the Secretary of State for Business Energy and Industrial Strategy, instructed by the Government Legal Department. She writes the chapter on the Employment Protection in the event of insolvency Directive in Gore Brown on EU Company law.