In Skills Development Scotland Co Ltd v Buchanan and another the EAT held that a Transfer of Undertakings (TUPE) transfer in 2002, by which the female claimants and their male comparator transferred on different salaries, amounted to a genuine material factor defence to equal pay claims brought six years later.

The EAT held it was not material that the employer could have taken action to reduce the pay disparity by freezing the comparator’s pay rather than including him in “across the board” pay rises. The TUPE transfer remained the underlying cause of the pay disparity and it was held that it was a genuine material factor not tainted by sex.  

Interestingly, the EAT found that the passing of six years following the TUPE transfer in 2002 did not cause a gender-neutral explanation to lose its “non-sex” character. The fact that there is no general principle that the defence will "evaporate" with the passage of time may therefore assist employers in defending equal pay claims.