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25 January 2013
Employment Appeal Tribunal (EAT)
Langstaff J, Miss J Gaskell and Mrs A Hibberd
Claims for equal pay require there to be a comparator in the same employment. That means employment by the same employer or an associated employer; or, if the employers are different, there must be a single source of terms of employment. Two employers are associated if one is a company of which the other (directly or indirectly) has control or if both are companies of which a third person (directly or indirectly) has control.
Here a council transferred some of its services to a limited company and to two limited liability partnerships (LLPs). It retained control of all three. Clearly the limited company was an associated employer of the council - so employees in the limited company could use as equal pay comparators employees of the council. But the employers argued that the LLPs, not being ‘companies', could not be associated employers with the council.
But the EAT held that the term ‘company' covered limited liability partnerships - so employees of those LLPs could use council employees as equal pay comparators.
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The status of employment rights on the transfer of an undertaking is an extremely complex area of...