TRANSFER TERMS

Sodexo ltd v Gutridge and ors

To succeed with an equal pay claim, a woman has to compare herself with a man “in the same employment.” In Sodexo ltd v Gutridge and ors, the Employment Appeal Tribunal (EAT) said that, after a TUPE transfer, women could still benefit from any enhanced terms they acquired before the transfer even if their comparator had not transferred over.

Basic facts

Ms Gutridge and her colleagues worked as domestic staff for an NHS Trust until they were transferred under the TUPE regulations on 1 July 2001 to work for private sector contractors, Sodexo Ltd.

Just over five years later - in December 2006 - they took out equal pay claims against both Sodexo and the Trust. The women argued that, as their work was of equal value to male maintenance workers, they were entitled to be paid the same by the Trust in the period leading up to the transfer and that this liability then passed to Sodexo in July 2001.

Sodexo argued, however, that their claims were out of time as they should have brought them within six months of the end of the relevant “employment”. In other words, within six months of the date of the transfer. It also argued that even if It was liable, the women could only claim equality up to the date of transfer when their pay went back again to the previous level so that they lost the benefit of the equality clause on transfer.

Tribunal decision

The tribunal said that the equality clause had the effect, prior to the transfer, of substituting more favourable terms and conditions of employment into the women’s contracts of employment. These rights then transferred over under TUPE to Sodexo.

The fact that the women had not taken proceedings to establish those rights was irrelevant as “the right to the benefit of the equality clause bites immediately the conditions for its application apply. There is no need for successful proceedings to have been taken ...”

As the women’s equal pay claims related to their employment with Sodexho, the six-month time limit for bringing a claim did not start to run until the date of termination of the women’s employment with Sodexo. They could therefore make a claim in respect of their employment both with the Trust and with Sodexho.

EAT decision

The EAT partially reversed the tribunal’s decision. It ruled that the outcome of the House of Lords decision in Preston and ors v Wolverhampton Healthcare NHS Trust and ors (No 3) was that the six month time limit started running from the date of the transfer “for all equal pay claims which derive from the equality clause with the transferor, at least with respect to alleged breaches by the transferor”. As the women did not bring their equal pay claims within six months of the transfer, they were barred from bringing their claims at all.

But had they brought the claims within the six month time limit, could the women keep the higher rate of pay after the transfer?

The EAT said that the law required the women to be in “common employment” with the men but that this was only to establish the enhanced contractual terms, not to maintain them. It made clear that they could not compare themselves with a man once he stopped being a comparator, but they could not actually lose the enhanced rights as they had, by then, been incorporated into their contracts.

As the women were enforcing a contractual right which was “derived from the equality clause operating with respect to the transferor”, they could enforce any terms against Sodexo that were enforceable against the Trust.

Given that they were still employed by Sodexo when they issued proceedings and it was in continuing breach of the equality clause, their claims in relation to post-transfer unequal pay were in time. So although the women’s claims against the Trust were out of time, their claims against Sodexo were in time and it was liable from the point of transfer.