Wednesday 20 March 2013

Equal Pay / Associated Employers

[Thanks to James English of Samuel Phillips solicitors for preparing this case summary]
Is a limited liability partnership a 'company' for the purposes of the Equal Pay Act?

Yes, says the EAT in Fox Cross & Others v Glasgow City Council & Others.

The Claimants were Council employees, until they were transferred to three different bodies.  One group went to a company, whilst two groups went to two different LLPs.  All three groups wanted to compare their pay with Council employees.

The employment tribunal held that the company was an associated employer but the LLPs were not. Overturning that decision, Langstaff P held that an LLP fell within the definition of 'company' under section 1(6) of the Act.  As an anti-avoidance measure, the EAT adopted a purposive construction.

Having decided that issue, the EAT did not have to consider whether there was a 'single source' responsible for pay but did provide some illuminating if obiter comments.  The focus should be on the alleged single source, not necessarily the Claimant's employer, as the central question is whether there is a body which is responsible for the inequality and which could restore equal treatment.  Although it did not intervene on a daily basis, the Council retained overall responsibility for the LLPs.

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