In the case of Sodexo Ltd (1) Gutridge and Others the Employment Appeal Tribunal (EAT) held that where there had been a transfer under the Transfer of Undertakings (Protection of Employment) Regulations 1981 (Tupe 1981) the time limit to enforce equal pay claims was six months from the transfer in respect of breaches committed by the transferor. In respect of breaches committed by the transferee the time limit for bringing the claim was six months from the termination of employment.

The Equal Pay Act 1970 (the Equal Pay Act) implies an equality clause into employment contracts and requires the equal treatment of men and women in the same employment. Claims can only be brought within six months after the termination of the employment of which the claim relates.

Broadly Tupe 1981 provided for certain rights under an employment contract to be transferred from a transferor to transferee upon the transfer of any trade or business. Tupe 1981 has been replaced by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (Tupe 2006). Tupe 2006 similarly transfers certain employment rights upon a relevant transfer.

For background on how Tupe 2006 affects pension rights please see our briefing from April 2005: The Pensions Act 2004: Tupe and Pensions.

In this case the claimants’ employment contracts had been transferred under Tupe 1981 from North Tees and Hartlepool NHS trust (the transferor) to Sodexo Limited (the transferee). The claimants brought a claim against the transferee in respect of breach of the equality clause by the transferor prior to the transfer and a claim for breach by the transferee after the transfer. The claims depended upon establishing equal pay with comparators who had been employed by the transferor but not transferred to the transferee.

The EAT held that Tupe 1981 transferred liability from the transferor to the transferee for breach of the equality clause prior to the transfer. However, the time limit for bringing a claim in respect of breach by the transferor was six months from the date of the transfer. Therefore the claimant could not enforce this right against the transferee as the claim was out of time.

In this respect the EAT confirmed the House of Lords decision in Preston v Wolverhampton which held that claims for access to pension schemes brought by part time workers had to be brought against a transferor company within six months of the Tupe transfer.

The EAT held that Tupe 1981 imposed a continuing liability for the transferee to fulfil the employment obligations prior to the transfer. The time limit for bringing the claim in respect of breach by the transferee was six months from the termination of employment with the transferee.

The EAT allowed the claimant to establish discrimination by using an employee as a comparator even though the employee had not transferred to the transferee. The EAT rejected the argument that the equality clause only applied in respect of the period where the claimant and comparator were in the same employment.