25 March 2014
In equal pay cases does a Limited Liability Partnership (LLP) qualify as an 'associated employer' under s1(6) of the Equal Pay Act 1970 (now the Equality Act 2010) for the purpose of identifying a comparator employed by a different entity?
Daniel Barnett’s Employment Law Bulletin summarises a recent case.
The Court of Session in Glasgow City Council v Unison looked at an outsource by Glasgow City Council, whereby services for parking enforcement and direct care services (care, cleaning, catering and related services) were transferred into LLPs set up to operate those outsourced services and the women who transferred wanted to rely upon male comparators still employed by Glasgow council.
The court accepted that LLPs were companies in the broader sense (rather than the narrower Companies Act 2006 definition) and could be considered an associated employer on that basis.
Employers who deal in any outsourcing model (particularly where equal pay claims have been more common in recent years such as local authorities) need to be diligent to avoid inadvertently assuming large financial liability for latent equal pay claims that may have arisen outside of their knowledge and control.