Employment: Equal pay/TUPE



Equal pay claims (not only claims to pension rights) do not transfer on a TUPE transfer.

The extent of the rights of part-time workers to claim pension benefits under the Equal Pay Act 1970 is now well established, particularly as a result of the principles laid down in the leading case of Powerhouse Retail Ltd v Burroughs. One point in particular that was decided in Powerhouse was that, where there has been a TUPE transfer, the right to bring a claim to pension benefits under the Equal Pay Act does not transfer i.e. the employee must bring a claim against the transferor within 6 months after the TUPE transfer (six months being the normal time limit for brining an equal pay claim) or lose the right altogether.

In a recent case which considered the rights of trade union employees where there was an amalgamation of trade unions (NUPE, COHSE and NALGO to form Unison), this issue was considered again.

In Unison v Allen it was accepted that such an amalgamation constituted a transfer of an undertaking for the purposes of TUPE and that it was TUPE which governed which rights transferred automatically with the employees. Of more interest to most employers was the decision that no equal pay claims (and not just claims to pension rights as dealt with in Powerhouse and which would be exempt from TUPE anyway) could survive a TUPE transfer. Employment with the transferee after a TUPE transfer is a ‘separate employment’ for the purposes of the Equal Pay Act and so any outstanding claim against the transferor will not transfer automatically to the transferee under TUPE and must be made within six months of the TUPE transfer against the transferor or not at all.

Point to note:

  • This case should be treated as the exception that proves the rule. TUPE states that the only contractual liability of an employer that definitely does not transfer under TUPE is ‘ that which relates to an occupational pension scheme’ for which provision is made separately in other legislation and government guidance. Outside the contract all other civil rights and obligations of the employer transfer – including responsibility for outstanding claims under all the other anti-discrimination laws. This is why the giving and receiving of ‘employee liability information’ is such an essential part of the TUPE transfer process on which expert advice should always be taken at the earliest possible stage.