This is about power and fairness at work. When staff transfer under TUPE, employers can’t shrug off pay gaps that fall along racial lines. The recent EAT decision in Mr Alpha Anne & Others v Great Ormond Street Hospital makes that plain: once the employer becomes you, you own the problem — and you must justify any unequal treatment quickly or face liability.
What happened in plain terms
- Who: Cleaners at Great Ormond Street Hospital who transferred from a contractor (OCS) to the Trust under TUPE.
- What: They were paid the London Living Wage under OCS, while comparable directly employed NHS staff were on higher Agenda for Change (AfC) rates. Most transferred staff were from BAME backgrounds; most directly employed comparators were white.
- Claim: The transferred workers said the Trust’s failure to put them on AfC pay amounted to indirect race discrimination.
- Outcome: The EAT split the claim. Pre‑transfer complaints failed; post‑transfer complaints succeeded.
Why the pre‑transfer claims failed
Before the transfer the workers were employed by OCS. The EAT followed established law that a client cannot normally be sued for pay set by an independent contractor, even if the client has influence. The Trust had not actively prevented OCS from paying more, so it was not responsible for pay decisions made while OCS was the employer. Bottom line: responsibility follows the employment contract — not the service relationship.
Why the post‑transfer claims succeeded
The moment the Trust became the employer, the legal picture changed. From the transfer date the Trust was responsible for the transferred workers’ terms and conditions. The EAT found the continued pay gap after transfer did amount to indirect discrimination because:
- The pay disparity disproportionately affected workers from a protected racial group; and
- The Trust failed to show that delaying equalisation was a proportionate means of achieving a legitimate aim.
The court said the Trust should have moved to equal pay on or shortly after the transfer. A delay needed a strong, justifiable reason — which the Trust did not provide.
TUPE, harmonisation and variation clauses
TUPE normally prevents employers from imposing changes to terms and conditions simply to harmonise pay. But there’s an important exception: valid contractual variation clauses. If a transferring contract contains a lawful clause allowing reasonable changes, those changes can be implemented after transfer without breaching TUPE. In this case, the Claimants’ contracts included such a clause, so harmonisation to AfC rates was legally possible.
Practical rule: check the transferring contracts. If they permit reasonable variations, harmonisation may be lawful — but it still must not produce or perpetuate unlawful discrimination.
Practical implications for employers and unions
This decision forces employers to act proactively when staff transfer in under TUPE. The practical steps are straightforward but urgent:
- Audit pay and terms: Compare the terms of incoming staff with existing employees in the same roles.
- Check demographics: Identify whether any pay or terms disparity disproportionately affects a protected group.
- Assess justification: If disparities exist, decide whether delaying or refusing harmonisation can be justified as a proportionate means of achieving a legitimate aim. Be ready to prove it.
- Review contracts: Look for valid variation clauses in transferring contracts that might lawfully permit harmonisation.
- Document decisions: Keep clear records of the analysis and the reasons for any delay or differential treatment.
- Get advice early: Where disparities are identified during due diligence, seek legal and equality advice before the transfer completes.
Employers often lack reliable demographic data. That’s a practical barrier — but it’s not an excuse. If you can’t show the disparity isn’t discriminatory, the law will treat unexplained disparities as suspect.
What this means for organising and collective action
This ruling hands a clear tool to workers and unions: transfers are a moment to press for equality. When a contractor’s workforce moves in-house, that’s the time to demand parity — not months later. Unions should:
- Push for full transparency in pre‑transfer due diligence.
- Use the transfer window to press for immediate harmonisation where pay gaps track protected characteristics.
- Hold employers to account for any delay and demand written, proportionate justifications.
- Support members to gather evidence of disparate impact and to raise claims where employers fail to act.
Conclusion and clear next steps
If you’re an employer: don’t wait. Audit, document, justify, and where necessary equalise — quickly. The cost of delay is legal exposure and damaged trust.
If you’re a worker or union organiser: treat TUPE transfers as a frontline for equality. Demand parity at the point of transfer. If employers stall, organise — assemblies, petitions, and legal challenge are all tools to force action.
This case is a reminder: when workers move, responsibility moves with them. Employers who ignore that responsibility will be held to account. Workers who organise around it can win real, immediate change.
By Patrick Harrington
