UNISON v MRS M P ALLEN & OTHERS [2007] UKEAT 0056_07_2607

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2007] UKEAT 0056_07_2607

Case No Appeal No. UKEAT/0056/07

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

UNISONAPPELLANT

MRS M P ALLEN & OTHERSRESPONDENT

Before

Mr Justice Elias

Date 26 July 2007

[1]APPEARANCES For the Appellant MR MICHAEL FORD (of Counsel) Instructed by: Messrs Thompsons Solicitors 18 Lawford Street Old Market BRISTOL BS2 0DZ For the Respondent MR ANDREW SHORT (of Counsel) Instructed by: Messrs Rowley Ashworth Solicitors 247 The Broadway Wimbledon LONDON SW19 1SE SUMMARY Equal pay Act – Out of time The claimants before the Employment Tribunal alleged that when they were employed by NUPE, that union had breached their rights under the Equal Pay Act in connection with their pension rights. Subsequently, NUPE transferred to Unison by way of a trade union amalgamation. The claimants brought their claims years after the transfer but whilst still employed by Unison. The issue arose whether they had brought them in time within the meaning of s2(4) of the Equal Pay Act. This requires them to bring their claims within six months of the employment terminating. Initially they claimed that their contracts transferred to Unison under TUPE and that the employment did not end until they ceased to be employed by Unison. However, that argument was doomed to fail after the decision of the House of Lords in Powerhouse Retail v Burroughs

[2006] IRLR 381

which held that in such circumstances the relevant employment was employment with the transferor. They argued that Powerhouse was decided the way it was only because pension rights were not transferred under TUPE. So they alleged that their contracts had transferred in their entirety as a consequence of the transfer of property and engagements in the course of the amalgamation. On that premise, they submitted that the relevant employment, following the reasoning in Powerhouse , was that with the transferee, Unison. The Employment Tribunal upheld their arguments but Unison's appeal was successful. The claims were made out of time. Observations on the effect of the Powerhouse case. THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT) The issue in this case is whether the Respondents to this appeal, whom I shall call the Claimants as they were before the Employment Tribunal, presented certain claims under the Equal Pay Act in time. The relevant provision of the Act in question is s2(4). (The time limits have subsequently been amended but these are not material and in any event were not in force at the material time.) It is common ground that its effect in this case is that the claim must be made on or before the date which falls "six months after the day on which the woman was employed in the employment." The dispute concerns the meaning of the concept of "employment" in the somewhat unusual circumstances of this case. The background .

[2]The factual background is extremely brief. There was an agreed statement of facts which was as follows:

"(a) The Claimants were employed by NUPE. (b) The Claimants contend that they were prevented from becoming members of NUPE's Occupational Pension Scheme by the terms and conditions of their employment, the rules of the scheme and/or the policy. (c) In about July 1993, UNISON was formed as a result of a merger of various unions including NUPE. (The three amalgamating unions were COHSE, NUPE and NALGO, under the provisions of the Trade Union and Labour Relations (Consolidation) Act 1992 following a ballot of the members of these three unions). (d) The merger was affected by way of an amalgamation. (e) From then on the Claimants were employed by UNISON. (f) On various dates, all of which fell more than six months after the date in paragraph (c) above, the Claimants presented these claims."

[3]The basis of the complaint is that the Claimants were formerly clerical support and administrative staff employed by NUPE and that they were excluded from the pension scheme whereas officers of NUPE were allowed to join. It is alleged that the majority of NUPE's clerical support or administrative staff were female and the majority of officers were male and that therefore there was indirect sex discrimination. The Tribunal has not yet considered any of the merits of the claims. It has merely decided as a preliminary issue that their claims were brought in time. That is the decision which UNISON appeals. The relevant legislation .

[4]In order to determine the issue in this case, it is necessary to consider the legislation which regulates the merger of trade unions. Merger may be effected in one of two ways, either by amalgamation or by a transfer of engagements. The circumstances in which each procedure applies is identified by ss97(1) and 97(2) respectively of the Trade Union and Labour Relations (Consolidation) Act 1992 ( TULCRA ), as amended. They are as follows:

"(1) Two or more trade unions may amalgamate and become one trade union, with or without a division or dissolution of the funds of any one or more of the amalgamating unions, but shall not do so unless – (a) the instrument of amalgamation is approved in accordance with section 98, and (b) the requirements of [section 99 (notice to members) and section 100 (resolution to be passed by required majority in ballot held in accordance with sections 100A to 100E)] are complied with in respect of each of the amalgamating unions. (2) A trade union may transfer its engagements to another trade union which undertakes to fulfil those engagements, but shall not do so unless – (a) the instrument of transfer is approved in accordance with section 98, and (b) the requirements of [section 99(notice to members) and section 100 (resolution to be passed by required majority in ballot held in accordance with sections 100A to 100E)] are complied with in respect of the transferor union."

[5]The difference between the two schemes is that under an amalgamation two or more unions form a new union and each transfers its operations to it, whereas under the transfer of engagements, one trade union transfers its engagements to another existing union.

[6]In each case the merger has to be approved by the members of the union. In the case of a transfer of engagements only the members of the transferor union vote, whereas with an amalgamation the members of each of the unions have the right to vote. Unless the union rules require otherwise, a simple majority of the members voting is sufficient to ensure the transfer. There are provisions designed to ensure that the union members are properly and fully acquainted with the consequences of the merger, and that the ballot is fairly held.

[7]Section 105(1) facilitates the transfer of property:

"Where an instrument of amalgamation or transfer takes effect, the property held – (a) for the benefit of any of the amalgamating unions, or for the benefit of a branch of any of those unions, by the trustee of the union or branch, or (b) for the benefit of the transferor trade union, or for the benefit of a branch of the transferor trade union, by the trustee of the union or branch, shall without any conveyance, assignment or assignation vest, on the instrument taking effect, or on the appointment of the appropriate trustees, whichever is the later, in the appropriate trustees."

[8]Section 105(4) makes an exception for property which is specifically exempted by the instrument of amalgamation or transfer, or if it constitutes stocks or securities in certain funds.

[9]There is a specific provision in s97(3) of the Act protecting the interests of creditors; "An amalgamation or transfer of engagements does not prejudice any right of any creditor, or any trade union, party to the amalgamation or transfer." This Act is a consolidation Act and it reproduces in almost identical words provisions which were formerly found in the Trade Union (Amalgamations) Act 1964.

[10]Initially the Claimants sought to contend that their contracts of employment were transferred from NUPE to Unison by operation of the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("TUPE 1981". This has now been replaced by TUPE 2006, but that was not in force at any material time) and that therefore their employment carried on unless and until terminated by Unison. There is clear authority that a union merger does indeed constitute a TUPE transfer: see the decision of the Vice Chancellor in Godrich & Anor v Public & Commercial Services Union and Reamsbottom

[2002] EWHC 1642 (Ch)

[11]They wished to contend that their employment was continuous between transferor and transferee so that time does not begin to run until the termination of their employment with the transferee. The House of Lords subsequently determined otherwise in Powerhouse Retail v Burroughs

[2006] IRLR 381

that at least where claims are made alleging breach of the Equal Pay Act with respect to occupational pensions, time runs from the point of transfer. The employment with the transferor is distinct and separate from the employment with the transferee, and the six months limit runs from the termination of employment with the former.

[12]There is an issue of fundamental significance in this case as to the scope of that principle. Does it only apply because liabilities with respect to occupational pension schemes are specifically exempted from the usual principle that the rights and obligation of employees on a TUPE transfer go across to the transferee (see regulation 7 of TUPE 1981; now reg.10 of TUPE 2006). Or were their Lordships intending to lay down a wider principle that employment with the transferor should always be treated as separate employment for the purposes of s2(4), whether liability has transferred to the transferee or not, at least with respect to claims where the alleged breach occurred exclusively prior to the transfer? We return to consider that issue later in this judgment. The decision of the Employment Tribunal .

[13]The Claimants' argument before the Employment Tribunal was essentially as follows. The contracts of service of union staff are "property" within the meaning of s105 of the 1992 Act. Therefore they automatically transfer by virtue of that section. This is supported, it was said, by the decision of the Court of Appeal in Co-Operative Group CWS Ltd v Stansell Ltd and Dire

[2006] EWCA Civ 538

[14]It follows that all liabilities pass to the transferee, including pension liabilities (notwithstanding that they do not transfer under TUPE). Since liability passed, this case is distinguishable from the situation in Powerhouse . On a proper analysis of that decision, it is clear that in circumstances where liability with respect to the claim in question has transferred, employment with the transferor and the transferee must be treated as being part of the same employment. Accordingly, the six month period prescribed by s2(4) does not begin to run until termination of the contract with the transferee.

[15]The Employment Tribunal accepted that argument, holding that liability for pensions had transferred as part of the property transferred under s105, and that the consequence was that employment with NUPE and Unison was the same employment within the meaning of s2(4) of the Equal Pay Act . Accordingly the claims were in time. Unison challenges both these conclusions.

[16]We therefore have to decide two questions. The first is whether liability for these alleged breaches with respect to pension rights did transfer as alleged. That involves an analysis of the Court of Appeal decision in Co-Operative Group CWS Ltd v Stansell Ltd and Dire

[2006] EWCA Civ 538

. If liabilities did not transfer, then it is common ground that Powerhouse applies and the Claimants are out of time.

[17]The second is whether, if these liabilities did transfer, the Claimants' employment with the transferee was the same employment as their earlier employment with the transferor. That involves an analysis of the Powerhouse case. If the employment was not the same employment, then again the Claimants are out of time. The appeal .

[18]The focus of the appeal has in one respect shifted from that heard below. The argument before the Employment Tribunal was based on the premise that if the contracts were transferred, that would have to be because they were an aspect of the property transferred under s105. It seems that the explanation lies in the curious fact that although there is express reference to engagements transferring when that form of merger is defined, there is no such specific reference to the engagements or operations of the unions transferring where the merger takes the form of an amalgamation.

[19]It was apparently for this reason that counsel considered that any transfer of staff contracts would therefore have to be achieved under s105, the property provision. Certainly, if the argument was framed in this way in the belief that this is what the Court of Appeal had decided in the CWS case, then we think it was an error. The Court there decided that contracts were transferred as a part of the transfer of engagements.

[20]We have no doubt that the engagements transfer with an amalgamation just as they do with a transfer of engagements, save that they transfer to the new union and not an existing one. That is what is involved when unions merge to become one trade union. Accordingly, there is room for the argument that even if, contrary to the finding of the Employment Tribunal, the contracts are not property, they transfer as part of the engagements. This is technically a new point but it involves no new evidence, there was no objection to it being run now, and it would be unjust not to hear it. Do the liabilities transfer ?

[21]Accordingly, Mr Short, counsel for the Claimants, contends that there are two independent ways in which the contracts of employment (including liability for pensions) may transfer. The first is by virtue of the transfer of property, as the Employment Tribunal found, and the second by the transfer of engagements.

[22]Mr Ford, counsel for Unison, advanced different arguments in rebuttal of each of these submissions. However, a common response to both was that in Nokes v Doncaster Amalgamated Collieries Ltd

[1940] AC 1014

, the House of Lords had established that it is a fundamental principle of the common law that an employee should not be compulsorily transferred against his will, and that it would require very clear language to achieve that result. Whether one focused on the property or transfer of engagements, neither provision unambiguously included the transfer of employment contracts.

[23]In Nokes the employee was prosecuted for absenting himself from work. He was found liable by the justices and appealed. The basis of the appeal was that he had formerly been employed by the Hickleton Mining Company Limited. That had become amalgamated with other companies pursuant to s154 of the Companies Act 1929 . He contended that his contract did not transfer when that amalgamation occurred and he could be criminally liable only if he was employed by the new company. Under s154 a court could sanction a compromise or arrangement resulting in a transfer of the undertaking of one company to another and in the course of so doing could make an order to:

"make provision for all or any of the following matters (a) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of any transferor company …"

Subsection (4) then defines "property" as follows:

"In this section the expression "property" includes property, rights and powers of every description and the expression "liabilities" includes duties."

[24]The employee submitted that these words were not wide enough to transfer the personal rights and obligations under a contract of employment. Their Lordships accepted this submission and held that notwithstanding the very wide definition of "property", contracts of employment did not fall within it. Viscount Simon described it as a "fundamental principle of our common law" that "a free citizen, in the exercise of his freedom, is entitled to choose the employer who he promises to serve, so that the right to his services cannot be transferred from one employer to another without his assent". Lord Atkin, with whose judgment Lord Thankerton expressly concurred, gave a ringing and memorable endorsement of that principle. He said (page 2, 1026):

"….I confess it appears to me astonishing that apart from overriding questions of public welfare power should be given to a court or anyone else to transfer a man without his knowledge and possibly against his will from the service of one person to the service of another. I had fancied that ingrained in the personal status of the citizen under our laws was a right to choose for himself whom he would serve and that this right of choice constituted the main difference between a servant and a serf."

[25]Viscount Simon LC and Lord Porter delivered speeches to similar effect, and Lord Romer dissented. Their Lordships concluded that notwithstanding that Parliament could override that fundamental principle, it would require very clear and definite language to achieve that result.

[26]Mr Ford contends that such clear language is not provided here. Indeed, following the Nokes case, he submits that Parliament must be taken to have been fully aware of the very strong fundamental common law principle enunciated in that decision. The presumption against transfer would be even stronger following Nokes than it was before that decision was made.

[27]I turn to consider in more detail each of the two routes relied upon as the basis for alleging a transfer of the employment contracts. As to the property argument, Mr Short essentially repeated the argument he had advanced before the Employment Tribunal. Although property is not defined in the statute, it had to be construed so as to facilitate the transfer of all the engagements from the old union to the new.

[28]That in turn required that the benefit and burden of contracts of employment, amongst other contracts, should be transferred. Any objection that this involved the compulsory transfer of a contract of employment contrary to the decision in Nokes should no longer hold sway because, following the implementation of TUPE in 1981, there is plainly now no objection to employees being transferred. A statute is "always speaking" and should be construed in the context of contemporary legislative policy; see Bennion on Statutory Interpretation, s288 . Moreover, the Court of Appeal in the CWS case had treated contracts of employment as property which can transfer in these circumstances.

[29]Mr Ford advanced a whole series of arguments why this contention was misconceived. First, he submitted that it is an abuse of language to describe the contract of employment as property. Moreover, the property of a trade union is held by trustees on trust for the union: TULCRA s12. It was even more curious to say that contracts of employment were held by the trustees of the union or that the statutory provision found in s16 of TULCRA, providing members of the union with a remedy against the trustees for "unlawful application of the union's property", could sensibly be related to contracts of employment.

[30]Second, he pointed to the wider statutory context. TULCRA is a consolidating statute and therefore should not be treated as having substantially changed the law. That is an uncontroversial proposition, confirmed by the House of Lords in Associated Newspapers v Wilson & Others

[1995] ICR 406

per Lord Bridge at 412F-413F.

[31]The predecessor of s105 was the almost identically worded provision in the Trade Union (Amalgamations etc) Act 1964. However, when that Act was passed the property held by a trade union was governed by s8 of the Trade Union Act 1871 which provided, under the heading 'Property of the trade unions vested in trustees", as follows:

"All real and personal estate of whatsoever belonging to any trade union registered under this Act shall be vested in trustees for the time being of the trade union appointed as provided for by this Act for the use and benefit of such trade union and the members thereof and …. upon the death or removal of any such trustees the same shall vest in the succeeding trustees for the same estate …."

Mr Ford contended that it was quite impossible to describe the contracts of employment as part of the real or personal estate

[32]Finally he contended that the argument that the meaning of property had changed with the advent of TUPE was wholly unsustainable. In any event, there is a right conferred by regulation 5(4A) of TUPE 1981 (now regulation 4(7) of TUPE 2006) for an employee to choose not to transfer on the transfer of a business, for whatever reason. Accordingly, the principle in Nokes is still reflected in that law.

[33]I accept the submissions of Unison. I wholly reject the notion that the contracts of employment would naturally be described as an aspect of the union's property held by its trustees, or that the concept has to be reinterpreted in the light of TUPE. Slaves are property, but employees are not. TUPE has not changed that. It has restricted the right of employers to refuse to accept employees on a transfer, but it has not compelled employees to transfer against their will. Moreover, the provisions of TUPE themselves define the extent to which the principle enunciated in Nokes has altered. There is no basis for saying that the construction of the concept of property could have altered when TUPE came into force. In my judgment, absent some very clear statutory language specifically including employees in the concept of property, employment contracts fall outside the definition.

[34]The alternative ground on which it is said that the contracts transfer is as part of the engagements. Reliance is placed is the decision of the Court of Appeal in Co-Operative Group CWS Ltd v Stansell Ltd and Dire

[2006] EWCA Civ 538

. The court in that case had to consider certain provisions in the Industrial and Provident Societies Act 1965 which were similar to s97 of TULCRA. Sections 50 and 51 provide for amalgamations and transfers of engagements respectively of these societies in a manner similar to the two methods of merger found in ss97(1) and (2) respectively of TULCRA,

[35]Section 51 of that Act provided for the transfer of engagements from one registered society to another in the following terms:

"51. (1) Any registered society may by special resolution transfer its engagements to any other registered society which may undertake to fulfil those engagements; and if that resolution approves the transfer of the whole or any part of the society's property to that other society, the whole, or as the case may be, that part of the society's property shall vest in that other society without any conveyance or assignment."

The first part is similar to s97(2) of TULCRA, although the method of obtaining consent is different; and the second part facilitates the transfer of property in a similar way to that achieved by s105.

[36]The facts in that case were that CWS wanted to sue Stansell Ltd for alleged breach of certain obligations under a building contract. That contract had not originally been made with CWS Co-Operative Group but rather with its predecessor, the Co-Operative Retail Services Ltd. (CRS). The contract had a clause dealing with assignment in the following terms:

"Neither the employer nor the contractor shall, without the written consent of the other, assign this contract."

[37]Stansell, as the contractor, had never granted its consent and therefore it was argued that there could be no assignment. The Court rejected an argument that a transfer pursuant to s105 did not constitute an assignment within the meaning of the clause. The question then was whether the right to sue Stansell had transferred from CRS to CWS notwithstanding the prohibition against assignment without the parties consenting.

[38]The judge held that it did not, but the Court of Appeal disagreed. The leading judgment was given by Lord Justice Mummery, with whose judgment Longmore and Jacob LJ agreed. Mummery LJ concluded that although the contract would have been inalienable at common law absent consent, that principle was overridden by the force of statute. His Lordship identified three factors in particular supporting that conclusion.

[39]The first was the wide language in which the legislation was cast (para 53): "The language of 'a transfer of engagements' is broad enough to include the liabilities of a society to its members and to third parties and the rights for a society against its members and against third parties; and to cover contracts which would not be ordinarily transferable without the consent of the other party, such as contracts of service with employees of the transferring society . " ... emphasis added.)

[40]Second he submitted that there was nothing in the statutory context itself to prevent the words of the section from having that natural and ordinary meaning. Finally, he did not consider that Nokes was sufficient reason for adopting a different construction. He pointed out that contracts of personal service were not 'property' within the meaning of what was then s154 and what is now s427(6) of the Companies Act 1985 . He summarised the position thus (paras 59-60):

"Sections 51 of the 1965 Act is materially different from the provisions in the Companies Acts (section 154 of the 1929 Act or section 427 of the 1985 Act) which are in the nature of procedural sections, which do not affect substantive law rights. Section 51 is a substantive provision intended to achieve objectives specific to the case of industrial and provident societies. As explained earlier in this judgment, industrial and provident societies, like building societies, friendly societies and trade unions, but unlike companies, are enabled by statute to transfer engagements and to amalgamate in a relatively informal way without the intervention of the court. Further, in the case of companies one entity can join with another by the acquisition of the other's share capital. This is not realistically possible in the case of industrial and provident societies, most of which do not use transferable shares: the shareholding in a society is not in the nature of an investment, has no significant value and has a maximum limit on the holding. The focus in the 1965 Act and similar legislation is on facilitating the joinder of undertakings or businesses in a simple and straightforward way. There is no equivalent to section 51(1) in the Companies Acts enabling a company to transfer its business or undertaking, including contracts of service, by passing a resolution . The transfer of the property of a company is ancillary to an order by the court under section 425 sanctioning a scheme of arrangement and binding members or creditors by a majority vote."

(emphasis added.)

[41]The Claimants submit that this is conclusive of this case. The transfer, as Mummery LJ makes clear, is akin to the sale of shares by a company which leaves contracts of employment wholly intact. Although the case was not specifically concerned with contracts of employment it is clear that the construction given by the Court of Appeal to s51 envisages that those contracts too would be transferred without the need for formal assignment. If the contractual rights and obligations were transferred, that must mean all the rights and obligations, including those relating to occupational pensions. There is no basis on which they could be excluded, irrespective of the practical problems which may then arise. To that extent they protected the interests of transferring employees more effectively than under a TUPE transfer.

[42]I was also referred to the decision of the EAT in Bedford and others v Furniture Timber and Allied Trades Union [1994] UKEAT 469/94. That was a case where members unlawfully disciplined by the transferor union sought their remedy against the transferee, the GMB. The EAT held that there was a transfer of engagements and that the GMB were liable. However, that case concerned members, not staff, and therefore it does not in my judgment assist in determining the issue arising here.

[43]Unison properly observes that the observations of Lord Justice Mummery with relation to contracts of employment were strictly obiter. Mr Ford points out that the context here is different from the 1965 Act; that there is a fundamental conflict between Stansell and the principle enunciated in Nokes v Doncaster Collieries ; and that accordingly it should have required very clear words to transfer contracts of employment. Moreover, it is pointed out that even where there is a TUPE transfer the employee continues to have a right to object to the transfer of his contract. The principle in Nokes is therefore honoured. Yet that is not achieved in this statutory context if the observations of Mummery LJ accurately represent the law.

[44]We have anxiously considered the observations of Mummery LJ. They were made without any argument on the point now in issue, and in particular without the Court having drawn to its attention the fact that under TUPE it remains the case that employees can object to transferring for good reason or no reason at all. Moreover, when the Trade Union (Amalgamations) Act 1964 was passed, it would not have been thought necessary to transfer such contracts. There were no rights to redundancy or unfair dismissal and dismissals could be effected usually on relatively short notice. No doubt it was assumed that in general staff would be kept on and no thought was given to the rights of employees. However, as with the merger of regiments or clubs, feelings can run high and it is not unknown for some staff vehemently to be opposed to having anything to do with the new union. Of course, any debt owed to an employee at the time of transfer could be recovered under the provision protecting creditors.

[45]It seems to us that in essence Nokes is based on a perception of public policy. We find it hard to believe that Parliament thought that they were overriding that principle when passing the 1964 Act. We recognise that in Nokes their Lordships also held that non-assignable contracts would be excluded from the power of transfer under the Companies Act 1929 , and to that extent CWS plainly distinguishes it because it held that such contracts were assignable under s51. But in our view the reasons for not compulsorily transferring employment contracts were seen in Nokes to be particularly powerful; the reasons were not simply the desire to protect the rights of a party whose consent to an assignment was required. Parliament may be taken more readily to override the rights of assignment of a party to a commercial contract than those of an employee who, if his rights are overridden, is compelled to accept a new employer.

[46]Of course, we recognise that in practice most employees would prefer compulsory transfer if this meant preserving their jobs. That is essentially what TUPE now achieves, although it does so by interfering with the employer's rights but leaving the employee free to refuse to transfer. However, the issue here is whether Parliament in 1964 should be treated as having by implication interfered with what only a quarter of a century before had been perceived as a common law right. We do not think they should, particularly since there would have been no apparent benefit to employees at that time in adopting such legislation.

[47]In our judgment the contracts of staff do not transfer merely by virtue of the merger legislation itself. Rather, they transfer pursuant to TUPE, but that leaves the occupational pension obligations with the transferor. It follows that the claims are out of time. Assuming liability transfers, is there a single "employment"?

[48]In view of the answer to the first question, the second does not strictly arise. However, we have heard argument on it and will deal with it lest we be wrong on the first issue.

[49]The question in issue is this: in circumstances where the claim relates to an alleged breach of the equality clause before the transfer, does the six months run from the date of transfer i.e. when the contract terminated with the transferor, or from the termination of the employment with the transferee? Both counsel carried out a detailed textual analysis of the judgment of Lord Hope in Powerhouse Retail Limited v Burrows UGHS

[2006] IRLR 381

. Both claim to be loyal disciples, true to the revealed doctrine and each accuses the other of heresy.

[50]Powerhouse was in many ways very similar to this case. There also the allegation was that there had been a breach of an equality clause prior to the transfer. However, that was in circumstances where the contract of employment was transferred pursuant to the Transfer of Undertakings (Protection of Employment) Regulations 1981 ( TUPE ). In such a transfer pension rights are exempted from the principle that the rights and obligations move from transferor to transferee: see regulation 7 of TUPE 1981 ( now regulation 10 of TUPE 2006 ). Lord Hope, with whose speech Lords Scott, Rodger, Carswell and Brown agreed, observed that "the claim to which the time limit is to be applied is…the claim in respect of the operation of an equality clause relating to the woman's employment." He specifically rejected a submission that the concept of employment had to be equated with a specific contract of employment.

[51]Some observations from Lord Slynn of Hadley in Preston v Wolverhampton Healthcare NHS Trust

[1998] IRLR 187

which, it was argued, supported that proposition were, he said, to be read in the particular context of that case, namely where an employee was employed in a series of contracts by the same employer. As his Lordship pointed out, there was no reference to contract as such in s2(4). Lord Hope noted that the Equal Pay Act had predated TUPE but rejected the notion that the subsequent implementation of TUPE could affect the proper construction of s2(4) (paras 25-26):

"Why then should the subsection be given a different meaning when the time limit is invoked in the context of a claim relating to the operation of an equality clause which relates to a period of employment prior to the date of a TUPE transfer? It is true that section 2(4) of the 1970 Act was enacted before the coming into effect of the Acquired Rights Directive and, consequently, before the making of the TUPE regulations which transferred all the transferor's rights, powers, duties and liabilities under or in connection with the contract of employment to the transferee but left any rights, powers, duties and liabilities under or in connection with an occupational pension scheme with the transferor: see regulations 5(2)(a) and 7 (1)(b) of TUPE. But I do not think that the subsection can be taken to mean different things depending upon the part of the TUPE arrangements to which the claim relates. It is often said that a statute is always speaking. This is so, and where the language permits there is this element of flexibility. It can be adapted to contexts that were not foreseen when it was enacted. But the metaphor must not be pressed too far. A statute cannot speak with two different voices at one and the same time. The rule that section 2(4) originally laid down was that a claim in respect of the operation of an equality clause must be brought within six months of the end of the employment to which the claim related. It applied to each and every claim that might be made in respect of the contravention of a term modified or included by virtue of an equality clause: see regulation 2(1). The same rule must be applied where there has been a TUPE transfer. The only question is: to which employment does the claim relate? The answer, where the claim is in relation to the operation of an equality clause relating to an occupational pension scheme before the date of the transfer, is that it relates to the woman's employment with the transferor."

[52]He also considered that this construction best achieved the purpose of the time limit clause. It was likely, he thought, to produce greater certainty but then he added this (para 28):

"…But there is much more force in Mr Jeans' point that the best way of achieving the purpose of the time limit is to link it as closely as possible to the liability which is the subject of the claim. This is achieved if the period of six months within which the claim relating to the operation of an equality clause with regard to an occupational pension scheme provided by the transferor must be brought runs from the end of the claimant's employment with the transferor, to whom the liability belongs, rather than the end of her employment with the transferee. The fact that, where disputes arise, it is the link between the employee and the employer whose rights and obligations are in issue that matters is demonstrated by s.2(1A) of the 1970 Act, which enables an employer to apply to an employment tribunal for an order declaring the rights of the employer and the employee where a dispute arises in relation to the effect of the operation of an equality clause. There is an element of symmetry here which supports the meaning that is conveyed by the words of the subsection. …"

[53]Mr Short submits that Lord Hope was saying that the essential question was where the liability belongs. In Powerhouse it rested at all times with the transferor because pension rights were not transferred. Moreover, he did not say, as he might have been expected to do if the contrary argument were correct, that all disputes relating to the equality clause prior to the transfer related to the employment with the transferor. Rather, his Lordship specifically identified a dispute over occupational pensions. The significant feature was that liability was not transferred.

[54]Mr Ford contends that this misconstrues the decision. The key to it, he submits, is that Lord Hope was plainly saying that the proper construction of s2(4) did not change with TUPE, and could not have a different meaning depending upon whether the claims in issue fell within regulation 5(2)(a), which concerns contractual liabilities which transfer, or regulation 7(1)(b), which concerns pension rights which do not. In each case time begins to run from the date of transfer, which is when the employment with the transferor is terminated. The fact that the contract continues with the transferee for most purposes is immaterial.

[55]In our judgment Unison is correct. Read fairly, we think that Lord Hope was treating the employment with the transferor and the transferee as separate and distinct employments, as of course they would have been prior to TUPE. The fact that TUPE affected the contractual position of the parties has not affected the analysis of what amounts to employment within the meaning of s2(4). The concept of employment is the same whichever aspect of the contract is engaged, and whether the liability transfers under TUPE or not. It is an error in this context to focus on the contract. In each case, at least where the alleged breach relates solely to employment with the transferor, the relevant employment is that with the transferor.

[56]It follows that even if we are wrong on the first point, and the contracts did transfer, in our judgment the claims had to be brought within six months from the termination of the employment with the transferor. In this case that means from the time when the employment with NUPE came to an end. Since the claims were made many years after that, they are out of time. Disposal .

[57]The appeal succeeds on both grounds. Accordingly the claims must be dismissed on the grounds that they were lodged out of time.