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TUPE and equal pay – narrowing the pay gap
Friday, 15 July 2011 00:00
Implied into every employment contract is an equality clause prohibiting a pay system which discriminates on the grounds of sex, by reference to comparators carrying out equal work, and requiring equality of terms.
TUPE, on the other hand requires employers to maintain pay systems for those employees who transfer over under the regulations. Occasionally, a TUPE'd employee's terms and conditions are more favourable than those of the existing workforce. This has led to a number of claims of equal pay.
In Skills Development Scotland v Buchanan, the Employment Appeal Tribunal has confirmed that in these situations:
- it will usually be a defence to a claim that the reason for the disparity is the transfer and not the sex of the workforce; but more significantly
- the employer is not under a duty to narrow the pay gap by, for example, freezing the pay of the employees transferred to it whilst the other staff catch up; and that
- subsequent pay rises across the board which are decided fairly and without reference to sex, but which might maintain the pay gap, are likely to be fair.
Tozers’ employment partner Jill Headford says of the judgment “this is important clarification for those employers who regularly TUPE employees in from other organisations where terms and conditions can be very different”.