The claimants, two female employees of Skills Development Scotland (SDS), compared their pay with a male colleague, Mr Sweeney. Mr Sweeney was paid over £12k more than they were, despite performing a similar type of work.

The claimants and Mr Sweeney had transferred under TUPE to Scottish Enterprise (SE) in 2002 and then to SDS in 2008. Prior to the 2002 transfer, Mr Sweeney had negotiated certain pay guarantees, which lasted until April 2004. His salary was then to be reviewed annually.  

In 2004, SE introduced a Performance Related Pay (PRP) scheme. Employees who appeared to be overpaid would not receive annual raises or bonuses. This condition was not applied to Mr Sweeney.  

After the 2008 transfer, SDS carried out a job evaluation exercise to address pay discrepancies. The exercise highlighted that the roles performed by the claimants and Mr Sweeney were of equal value. SDS argued that Mr Sweeney’s terms were protected under TUPE by the 2002 transfer. It contended that the reason for the pay disparity was the genuine material factor (GMF), not tainted by the sex of the employees.

The Tribunal agreed with this position for the period up to April 2004. However, it rejected SDS’s defence for the later period. SDS appealed.

The EAT upheld SDS’s appeal, deciding that SDS had established a GMF and dismissed the claimants’ equal pay claims.  

Comment

This case highlights that a GMF defence to an equal pay claim can be established through the preservation of a comparator’s terms under TUPE. Also, the passing of time will not mean that such a defence will disappear. That said, the burden remains on the employer to prove that TUPE remains the reason for the disparity.

Skills Development Scotland Co Ltd v Buchanan UKEAT/0042/10