Foley v NHS Greater Glasgow & Clyde & Orss (Equal Pay Act : Damages or Compensation)

For an equal pay claim based on a transferor’s pre-transfer breach of an equality clause, the six-month limitation period runs from the end of the employment with that transferor. A transfer to a new employer creates a separate employment for this purpose, even where statutory arrangements preserve terms and conditions and transfer contractual liabilities.

The relevant inquiry is the employment to which the claim relates, not whether the contract of employment has formally continued or which employer must meet the liability. The principle applies to non-TUPE statutory transfers as well as TUPE transfers. A new effectiveness argument will not ordinarily be entertained on appeal where it requires uninvestigated factual issues and was not fairly raised below.

Two claimants brought equal pay claims against NHS Greater Glasgow & Clyde following the dissolution of their former NHS Trust employers on 1 April 2004. Staff, contracts and liabilities transferred to the respondent health board under Staff Transfer Orders. The transfers were not governed by TUPE.

The Employment Tribunal held that claims based on pre-transfer unequal pay were subject to the six-month limit in section 2(4) of the Equal Pay Act 1970, running from dissolution. It therefore had jurisdiction only over the period after transfer.

On appeal, the claimants argued that the statutory transfer was materially different from a TUPE transfer and that, particularly because of inadequate consultation, the limitation rule breached the EU principle of effectiveness. The central issue was whether dissolution ended the employment to which the pre-transfer claims related.

1. Appeals dismissed. The Employment Tribunal was entitled, and absent legal error bound, to hold that the pre-transfer claims were out of time. The reference in its formal judgment to claims against the former Trusts was a patent error, since the claims were brought against the respondent board.

2. The governing question under section 2(4), read with section 2ZA(3), of the Equal Pay Act 1970 is which employment the claim concerns and when that employment ended. “Employment” is not synonymous with the continuity of the contract of employment. Liability passing to a transferee does not alter the identity or end-date of the transferor employment.

3. The claims based on alleged pre-1 April 2004 breaches concerned employment with the Trusts. That employment ended when the Trusts were dissolved and staff transferred to the respondent, a separate legal person. The Staff Transfer Orders created a new employment with the respondent, notwithstanding that contracts took effect as if originally made with it and terms remained unchanged. Nokes v Doncaster Amalgamated Collieries Ltd supported that conclusion at common law.

4. The principles in Preston No. 3 and Sodexo Ltd v Gutridge were not confined to pension claims or TUPE transfers. They apply where a claim concerns a transferor’s acts or omissions before a change of employer. The respondent could owe both a contingent obligation to compensate for the Trusts’ prior breach and an immediate obligation to comply with equality clauses itself. Those were distinct obligations relating to distinct employments.

5. The proposed effectiveness argument was a new appellate point. It depended on untested facts about information, consultation, advice and what the claimant would have done. It was not fairly raised before the Tribunal. In any event, the ECJ’s assessment of the six-month rule could not be separated artificially from its start date. No reference under Article 267 was warranted.

• Employment Appeal Tribunal: Appeals dismissed; the Tribunal’s time-bar ruling was upheld.
• Employment Tribunal, Glasgow: At a pre-hearing review in test cases, held that dissolution and transfer triggered the six-month limit under section 2(4) of the Equal Pay Act 1970 for claims concerning the former Trusts’ employment.