TUPE Doesn’t Fix Inequality, It Can Preserve It: Lessons from Alpha Anne v GOSH

TUPE is meant to protect staff when their employer changes, by keeping their terms and conditions the same. But a recent case involving Great Ormond Street Hospital (GOSH) shows the flip side. Keeping terms the same can also mean keeping a pay gap in place and if it isn’t fixed quickly enough, that gap can become unlawful discrimination.

What Happened

Eighty cleaners, most of them from minority ethnic backgrounds, transferred to the GOSH NHS Trust in August 2021 when their employer, contractor OCS, lost the cleaning contract and the work was brought in-house. Whilst employed by OCS, they’d been paid the London Living Wage (£10.75/hour). Directly employed NHS cleaners doing the same job were on £11.50/hour under the NHS’s standard pay structure.

The Trust had the right to move the transferred cleaners onto the higher NHS rate straight away, but it didn’t. The cleaners remained on the lower rate for around five months, with no real explanation for the delay.

The Employment Tribunal initially dismissed the cleaner’s discrimination claims. On appeal, the Employment Appeal Tribunal (EAT) disagreed – at least for the period after the transfer. The Trust could not be blamed for the pay gap that existed before it took the cleaners on, but once it became their employer, it had the power to close that gap immediately but chose not to. Given that the cleaners were disproportionately from minority ethnic backgrounds, that unexplained delay amounted to indirect race discrimination.

Why This Matters for Employers

• It wasn’t the pay gap itself that caused the problem – it was sitting on it. The Trust wasn’t punished for inheriting unequal pay. It was punished for having the power to fix it and not using it.
• Five months was too long. There’s no fixed rule for how quickly is “quickly enough,” but this case shows that the window can be short. If nothing is stopping you from levelling pay up, a tribunal will want to know why you didn’t.
• The “it’s not our mess” argument doesn’t hold up for long. Once you’re the employer, an old pay gap becomes your problem to solve – and the longer you leave it before fixing it, the more it looks like a choice rather than an accident of history.
• The makeup of the affected group matters. The fact that the cleaners were overwhelmingly from minority ethnic backgrounds, compared with the wider workforce on better pay, was central to the finding. It’s worth knowing who’s affected by any pay gap you’re sitting on.

The Practical Takeaway

If you take on staff through a TUPE transfer who are on worse terms than everyone else doing the same job, don’t let it drift. Going forward, we recommend that employers seek to identify any post-transfer indirect discrimination pay risks. Information on protected characteristics, terms and any differentials between transferred staff and existing staff should be analysed to ascertain:

• Whether pay and conditions could / should be changed post-transfer to remedy any potential indirect discrimination identified; and,
• If so, what are the risks/benefits of either seeking to harmonise terms or having a ‘two tier’ workforce (e.g. the potential for indirect discrimination claims).

Treat closing the gap as urgent – because this case shows that hesitation, not the original inequality, is what tips things into unlawful territory.