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Gutridge v Sodexho - A Real Life TUPE Horror Story for Employers?

The law relating to the transfer of an undertaking (TUPE) is complex and most of us prefer to avoid it. The TUPE legislation has given us all sorts of challenging cases. Gutridge is no exception.

Mrs Gutridge was employed as a cleaner by North Tees and Hartlepool NHS Trust Foundation. In 2001, her employment transferred to Sodexho. Five years later, Mrs Gutridge started an equal pay claim, using maintenance assistants, employed by the Trust (whose employment had not transferred to Sodexho) as comparators. Initially the court had to decide whether Mrs Gutridge had the right to bring an equal pay claim where the comparators had not transferred. It also had to consider whether she was in time.

They concluded that, before the transfer took place, the Equal Pay Act 1970 had created an equality clause in Mrs Gutridge’s contract of employment. This had the effect of substituting more favourable terms and conditions into her contract to bring it into line with the contracts of her comparators. The effect of TUPE was to automatically transfer the more favourable terms and conditions to Sodexho and her claim could therefore be said to relate to the employment with Sodexho.

The six-month time limit for bringing an equal pay claim would not start until her employment with Sodexho ended. That meant she could make a claim in respect of her employment both with the Trust and with Sodexho.

The Employment Appeal Tribunal agreed with the tribunal in part. Where there was a continuing breach on the part of Sodexho, the six-month time limit would run from the date that employment with Sodexho terminated. Sodexho had been involved in a continuing breach through its failure to honour the equality clause in place at the point of transfer. Therefore, Mrs Gutridge’s complaints against it were in time. It didn’t matter that her comparators were employed by the Trust, and not Sodexho. This unusual case raises a number of issues.

If a Company to whom employees are transferred has continuing liability under an equality clause, it means that transferee employers will have to deal with equal pay claims for which the original employer was responsible. These claims may not come to light for some time, sometimes years, after the transfer has taken place. Mrs Gutridge is over the first hurdle and it will be interesting to see how matters develop.

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