Chris Cox, RCN Director of Legal Services

Legal update: TUPE and fair pay

When organisations merge, or one enterprise takes over another, the challenge for the new employer is how to manage staff on different conditions of employment, particularly salaries.

The scope for ‘harmonising’ contractual terms, save upwards, is limited under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

But if nothing is done, and years later it becomes apparent that some male staff, for example, doing the same or comparable work to certain female staff, are being paid more, is the employer liable under the Equal Pay Act?

In Buchanan and another v Skills Development Scotland (2011) the male employee earned £10,000 more than the two female complainants when they were transferred from different employers to the respondent.

Six years later, after annual pay rises, the discrepancy continued.

The Employment Appeals Tribunal held that TUPE remained a valid material factor defence to an equal pay claim, being entirely unrelated to sex discrimination.

Secondly, the male employee had a contractual entitlement about pay rises that was unusual in this case.   

Equal pay is about gender inequality, and not ‘fair’ pay. However, employers should be cautious about relying on this case.

The longer a pay difference continues the less likely that TUPE will be the sole explanation for the differential.