Sodexo Ltd v Gutridge and others EAT/0024/08

equal pay | transfer of undertakings | transferees' liability

The Employment Appeal Tribunal (EAT) has considered transferees' liability for equal pay claims made by transferred employees following a TUPE transfer.

The case involved cleaners employed at Hartlepool General Hospital who transferred from North Tees and Hartlepool NHS Foundation Trust to Sodexo Ltd on 1 July 2001 when Sodexho took up a domestic services contract for the Trust. In December 2006, they brought equal pay claims comparing themselves to maintenance assistants employed by the Trust who had not transferred.

The Equal Pay Act 1970 implies into a woman's contract an "equality clause", which gives her contractual entitlement to the same pay terms and conditions as an appropriate male comparator. She is entitled to claim up to six years' arrears of pay, and the time limit for bringing a claim is six months from the end of employment. In respect of employment before the transfer, the EAT held that this period started on the date of the transfer, meaning that the claims were out of time. In respect of the period after the transfer, the EAT said that a transferor's failure to give equal pay to an employee creates a continuing contractual liability. When an employee who has the benefit of the implied equality clause transfers, her rights under the equality clause crystallise at the date of transfer and liability under the clause transfers to the transferee, and continues indefinitely. This means that claims can be brought within six months of the end of employment with the transferee. This was the case even though the comparator maintenance assistants remained with the transferor, and the transferee was unaware that it was paying the transferred cleaners at a lower rate.

Case transcript of Sodexo Ltd v Gutridge and others (Microsoft Word format, 113K) (on the EAT website)

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