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 IRLR 721, 106(30) LSG 13, ICR 1486, Court of Appeal - Jane McNeill QC, Ben Cooper QC
In an equal pay claim to which the Transfer of Undertakings (Protection of Employment) Regulations 1981 applied, and in which the women concerned remained in the transferee's employment, the claim against the transferee in respect of the transferor's breach of the Equal Pay Act 1970 had to be brought within six months of the date of the transfer.
The appellant employees (G) appealed against a decision that part of their equal pay claim against their employer (S) was time-barred, and S cross-appealed. G were female cleaners who worked at a hospital and had been employed by an NHS trust. Under a privatisation or contracting out arrangement, G's employment was transferred to S. Some years after the transfer G brought equal pay proceedings in which they sought to compare themselves with male maintenance assistants who worked at the hospital and whose employment had not been transferred to S. G 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 S. S submitted that G's claims were time-barred because the time for bringing an equal pay claim based on comparison with the male comparators expired six months after the transfer. The employment tribunal held that the effect of the Transfer of Undertakings (Protection of Employment) Regulations 1981 was to transfer to S the trust's liability to pay G at a higher rate and also to deem that G had always been employed by S so that, as they were still employed by S at the time when they initiated their claims, time had not begun to run against them for limitation purposes. The Employment Appeal Tribunal upheld that decision in respect of the post-transfer period but held that G's claims in respect of the pre-transfer period were time-barred because proceedings had to be brought within six months of the transfer. G submitted that the EAT had been wrong to hold that their claims in respect of the pre-transfer period were time-barred when they were initiated over five years after the transfer and that the employment tribunal had been right to hold that the employment to which such claims related for the purposes of the Equal Pay Act 1970 s.2(4) and s.2ZA(3) was the single period of employment which spanned their employment with the trust and S. S contended that once G had ceased to be in the same employment as the male comparators they lost their right to equal pay.
HELD: (Smith LJ dissenting on the limitation issue) (1) The employee could not have any greater rights against the transferee than she had against the transferor. The Regulations ensured that she had the same rights. Her rights against the transferor were limited in time: she had to make a claim within six months of the termination of her employment with the transferor. It was that right which transferred. Although the right to bring proceedings was against the transferee, the right was time limited to six months after the termination of her employment with the transferor, that was six months after the date of the transfer, Powerhouse Retail Ltd v Burroughs (2006) UKHL 13, (2006) 3 All ER 193 followed. Therefore the appeal was dismissed. (2) S's argument that the equality clause operated only during the period in which the claimant and her chosen comparator were in the same employment was misconceived. Common employment was necessary to establish the enhanced contractual terms, but not to maintain them. A woman could not continue to compare herself with the man once he ceased to be a comparator, but she did not lose such enhanced rights as had already been incorporated into her contract. Those rights were by then crystallised and she remained entitled to enforce them as a term of the contract. It would be wholly at odds with the purposes of the equal pay legislation if the woman could receive the male rate only whilst the male was employed on equal work. The EAT was right on that issue and the cross-appeal was dismissed, Sorbie v Trusthouse Forte Hotels Ltd (1977) QB 931 EAT approved and Macarthys Ltd v Smith (C129/79) (1980) ECR 1275 ECJ considered.