Equal pay and TUPE transfers

30 March 2010

You may recall our Insight, in July of last year, reporting on the Court of Appeal decision in Gutridge and ors v (1) Sodexo and (2) North Tees & Hartlepool NHS Trust. The Court of Appeal held that the six month time limit for bringing an equal pay claim, in respect of any period of employment with a transferor (ie original) employer from whom the employee has transferred, runs from the date of the TUPE transfer. Therefore, a Claimant who issues more than six months following the date of a TUPE transfer can only claim for back-pay to that transfer date and not any further.

In a case in which we have been involved (Jones (1) Harewood (2) Looker (3) v Blackpool, Fylde and Wyre Hospitals NHS Foundation Trust (1) Pennine Care NHS Trust (2) Halton & St Helens PCT (3)), the Newcastle Employment Tribunal has applied this approach to the dissolution of one Trust or PCT and the establishment of another; but not in the case of the mere change to Foundation Trust status.

The Tribunal held that it did not matter whether TUPE actually applied, (transfers within the NHS can be by different mechanisms, such as NHS Transfer Orders mirroring TUPE and applying the Acquired Rights Directive). Where there is a termination of employment with the dissolved Trust or other NHS body and a transfer of employment to the newly created body there is a new employer. There is no material difference between the provisions of the TUPE regulations, and the provisions of the relevant Transfer Orders relevant to these situations in the NHS.

However, the change to Foundation Trust status was not considered to be a transfer event: hence no dissolution and no termination of employment, therefore the time limit for issuing equal pay claims does not start to run.

The judgment recognises that the decision is likely to be appealed given the potential impact on the many thousands of claims brought against more than 450 Trusts or PCTs. However, as the decision stands, in any cases where there has been a reconfiguration of the NHS bodies involved, the impact will be significant.

We will report further on any developments.