Gutridge and Others v Sodexho Ltd
| Jurisdiction | England & Wales |
| Judge | Lady Justice Smith,Lord Justice Wall,Lord Justice Pill |
| Judgment Date | 14 July 2009 |
| Neutral Citation | [2009] EWCA Civ 729 |
| Docket Number | Case No: A2/2008/2373 |
| Court | Court of Appeal (Civil Division) |
| Date | 14 July 2009 |
[2009] EWCA Civ 729
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
MR JUSTICE ELIAS (PRESIDENT)
Before : Lord Justice Pill
Lady Justice Smith
and
Lord Justice Wall
Case No: A2/2008/2373
UKEAT002408RN
Miss Jane McNeill QC & Mr Ben Cooper (instructed by Messrs Thompsons) for the Appellant
Mr John Bowers QC & Mr Jeremy Lewis (instructed by Messrs Beachcroft) for the 1 st Respondent and (instructed by Messrs Eversheds LLP) for the 2 nd Respondent
Hearing date : 29 April 2009
Lady Justice Smith:
Introduction
This appeal concerns the interaction of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE) and the limitation provisions of the Equal Pay Act 1970. It is an appeal from the decision of Elias J President (as he then was) sitting in the Employment Appeal Tribunal (EAT) on 31 July 2008. Elias J allowed, in part, an appeal from the decision of an employment judge, Mr TM Garnon, sitting alone at the employment tribunal (ET) in Newcastle upon Tyne on 9 October 2007.
The facts
The case has been decided on the basis of agreed and assumed facts. The claimants, who are female domestic cleaners, were all employed by North Tees and Hartlepool NHS Trust (the Trust) prior to 1 July 2001. They worked at Hartlepool General Hospital. On 1 July 2001, under a privatisation or contracting out arrangement, all the claimants were transferred to work for Sodexo Limited (Sodexo). The claimants continued to work, as before, at Hartlepool General Hospital. In December 2006 (and on subsequent dates), the claimants brought equal pay proceedings in which they sought to compare themselves with male maintenance assistants who, at all material times both before and after 1 July 2001, worked at Hartlepool General Hospital. The male maintenance workers were not 'contracted out' and have been employed by the Trust at all times.
For the purposes of the application to the ET and the subsequent appeals, it has been assumed that the work of the domestic cleaners and the maintenance assistants was work of equal value, that the women cleaners were paid less than the male maintenance assistants and that there was no objective justification for that pay differential.
The Law
It is convenient at this stage to set out the relevant law and to outline where there is common ground in this appeal.
So far as relevant for present purposes, section 1 of the Equal Pay Act 1970 provides:
Requirement of equal treatment for men and women in the same employment
(1) If the terms of a contract under which a woman is employed at an establishment in Great Britain do not include (directly or be reference to a collective agreement or otherwise) an equality clause, they shall be deemed to include one.
(2) An equality clause is a provision which relates to terms (whether concerned with pay or not) of a contract under which a woman is employed (the woman's contract) and has the effect that –
….
(c) where a woman is employed on work which …is …of equal value to that of a man in the same employment –
(i) if (apart from the equality clause) any term of the woman's contract is or becomes less favourable to the women than a term of a similar kind in the contract under which that man is employed, that term of the women's contract shall be treated as so modified as not to be less favourable.
……
(6) Subject to the following subsections, for the purposes of this section -
(a) 'employed' means employed under a contract of service or of apprenticeship or a contract personally to execute any work or labour, and related expressions shall be construed accordingly;
and men shall be treated as in the same employment with a woman if they are men employed by her employer or any associated employer at the same establishment or at establishments in Great Britain which include that one and at which common terms and conditions of employment are observed either generally or for employees of the relevant classes.
6. Pausing there, it is common ground that, under the facts assumed to be true, the claimants were entitled to say that, in the period before they were transferred to Sodexo, their contracts had been modified so as to entitle them to be paid at the higher rate applicable to maintenance assistants.
The limitation provisions of the Equal Pay Act are in section 2 which is headed: ' Disputes as to and enforcement of equal treatment'. Section 2(1) provides that any claim in respect of the contravention of a term modified or included by virtue of an equality clause, including a claim for arrears of remuneration may be presented by way of complaint to an employment tribunal. However, section 2(4) provides that no determination may be made by an employment tribunal on a complaint under subsection (1) unless the proceedings are instituted on or before the qualifying date, as defined in section 2ZA. Section 2ZA provides:
(1) This section applies for the purpose of determining the qualifying date, in relation to proceedings in respect of a woman's employment for the purposes of section 2(4) above.
(2) …
(3) In a standard case the qualifying date is the date falling six months after the last day on which the woman was employed in the employment.
It is agreed that this is a 'standard case'.
Finally, the provision relating to the period for which arrears may be claimed is at section 2ZB which at subsection (3) provides that, in a standard case, the arrears date is the date falling six years before the day on which the proceedings were instituted.
The Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE) have now been superseded by regulations made in 2006 but the 1981 regulations were in force at the time of the transfer in this case. It is common ground between the parties that the transfer which took place on 1 July 2001 was a transfer to which the TUPE regulations applied.
Under the heading: ' Effect of relevant transfer on contracts of employment etc', regulation 5 provides:
5(1) A relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor in the undertaking or part transferred but any such contract which would otherwise have been terminated by the transfer shall have effect after the transfer as if originally made between the person so employed and the transferee.
(2)Without prejudice to paragraph (1) above, on the completion of a relevant transfer –
(a) all the transferor's rights powers duties and liabilities under or in connection with any such contract, shall be transferred by virtue of this Regulation to the transferee; and
(b) anything done before the transfer is completed by or in relation to the transferor in respect of that contract or a person employed in that undertaking or part shall be deemed to have been done by or in relation to the transferee.
Under the heading ' Exclusion of occupational pension schemes', regulation 7 provides that regulation 5 will not apply to so much of a contract of employment as relates to an occupational pension scheme. Thus the effect of regulation 5 and 7 combined is that, on a transfer to which the regulations apply, all the transferor's liabilities to the employee (including the liability to pay wages at the appropriate rate) are transferred to the transferee except the transferor's liability under an occupational pension scheme. Regulation 7 is relevant to this appeal not because the claimants are seeking to enforce pension rights but because it will be necessary to consider the House of Lords' decision in Preston and others v Wolverhampton Healthcare NHS Trust and others (No 3) [2006] ICR 606 also reported as Powerhouse Retail Limited v Burroughs and others [2006] IRLR 381. That case was concerned with a claim for pension rights. This case has become generally known as Powerhouse and I will adopt the same practice.
The case before the Employment Tribunal
The women sought equal pay for a period of six years prior to the date on which they lodged their claims. That period spanned the date of the transfer of their contracts of employment from the Trust to Sodexo. As I have said, it was assumed that, before the transfer, the claimants had been doing work of equal value to that of the male maintenance assistants who were in the same employment as them but were being paid at a lower rate. The women's case was that, under section 1 of the Equal Pay Act, the equality clause in their contracts took effect so that their contracts were modified so as to entitle them to the higher rate of pay received by the maintenance assistants. That right had crystallised before the transfer, although it had not been enforced by proceedings. The Trust was in breach of the modified contracts by continuing to pay them at the lower rate and became liable to the women for arrears of pay. On 1 July 2001, the women's contracts of employment, containing the modified pay clause, were transferred to Sodexo who then became liable to pay the women at the higher rate. Sodexo then continued to pay the women at the lower rate and was accordingly in breach of the modified term. It became liable for its own continuing post-transfer breach. It also became liable to the claimants for the Trust's pre-transfer breach, which was transferred to it under TUPE. Thus, when the claimants eventually lodged their claims against Sodexo in December 2006 (and later), they could recover for the arrears of...
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