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Transfer of undertakings/equal pay: Time for pension claims runs from date of TUPE transfer

This report relates to 1 case(s)

Key points

In Powerhouse Retail Ltd and others v Burroughs and others, the Court of Appeal holds:

  • The correct interpretation of regs. 5 and 7 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("TUPE") as far as Equal Pay Act 1970 claims for occupational pensions are concerned, is that pension terms of a contract of employment are not transferred to the new employer.
  • Overruling the EAT's decision in Preston v Wolverhampton (No 3) [2004] IRLR 96, the time limit for making a claim under the Equal Pay Act 1970 is confirmed as running from the date of the TUPE transfer, and not from the end of employment with the transferee.
  • The employee's cause of action is only against the transferor. Although an equality clause is implied by the Equal Pay Act 1970 into the contracts with the transferor and the transferee, it does not mean that they are treated as if they were one continuing contract.
  • The employee does not accrue any further pension rights against the transferor while subsequently employed by the transferee.