The Court of Appeal has upheld an EAT ruling (see e-bulletin) that means transferees may face substantial equal pay claims from employees whom the transferor should have paid at the same rate as a pre-transfer comparator. TUPE applies to transfer the salary level the employee ought to have received pre-transfer, even if the comparator hasn’t transferred to the transferee and the transferee has no knowledge of the inequality (and therefore no opportunity to rectify it).

The Court also confirmed that claims in relation to the period pre-transfer must be brought within six months of the transfer. Claims in relation to the period post-transfer can be made at any time up to six months after employment with the transferee ends (and can cover up to six years' arrears).

The risk of such claims may be reallocated using warranties and indemnities, depending on the parties' relative bargaining strengths. (Gutridge v Sodexo, CA)