In December 2003, the Employment Appeals Tribunal (EAT) handed down judgment in the case of Preston & Others v Wolverhampton Health Care NHS Trust & Others. It held that first, there is a breach of the Equal Pay Act 1970 in circumstances where pension scheme membership is compulsory for full-time staff but part-time staff are excluded – although not when membership is optional for part-time staff.
Second, the EAT held that where there is a TUPE transfer, time for the purposes of the six-month limitation period under the Equal Pay Act starts to run from the date employment ends with the transferee, and not from the date of the transfer.
The appellants in this case successfully appealed against the second limb of the decision. The Court of Appeal held that following a TUPE transfer, under the Equal Pay Act 1970, for the purposes of claims brought against the transferer, time runs from the date of the transfer, and not from the termination of the employee’s employment with the transferee(s).
Under regulation 7, pension rights are excluded from the transfer and those rights fall outside the contract of employment transferred to the transferee. Any claim for equal pay in relation to pension rights had to be based on the contract as it existed with the transferer.
As the pension terms did not transfer, that contract terminated at the time of the transfer, and therefore time for any equal pay claim in relation to pension rights began to run from that date.