Key points TUPE preserves the right to bring an equal pay claim after the transfer. Claims arising from the employment up to the date of the transfer must be brought within six months of the transfer. Transferees’ overall exposure to equal pay claims will therefore decrease six months after the transfer.
As ever, it is important for potential transferees to complete proper due diligence prior to a TUPE transfer to determine what claims they could inherit.
The claimants, all female cleaners, transferred by operation of TUPE to Sodexo Limited (Sodexo) under contracting out arrangements on 1 July 2001. They continued to work at Hartlepool General Hospital.
The women brought equal pay proceedings against Sodexo in December 2006 using male maintenance assistants as comparators. The maintenance assistants also worked at Hartlepool General Hospital both before and after 1 July 2001. The employment tribunal found in favour of the claimants.
Sodexo appealed on the grounds that the claims were out of time.
The EAT held that Regulation 5 of TUPE transferred two kinds of liability with respect to the equality clause:
- liability arising from the employment up to the date of the transfer (under Regulation 5(2)); and
- liability arising from the employment after the date of the transfer (under Regulation 5(1)).
Any claim under Regulation 5(2) must be brought against the transferee within six months of the transfer whereas the time limit for claims arising post transfer, under Regulation 5(1) must be brought within six months of the new employment ending.
The Court of Appeal upheld the EAT’s decision.
Lord Justice Wall concluded that he could not see why the claimants should have a greater right against the transferee in relation to a Regulation 5(2) liability than they would have had against the transferor. Therefore, it was right that the time limit for enforcing that claim was six months from the transfer.
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