27th March 2014

Equal Pay – Council Deemed “Single Source”

The Court of Session has recently decided that Glasgow City Council could not rely upon outsourcing arrangements to avoid liability for equal pay claims.  In Glasgow City Council (“GCC”) v Unison various services were outsourced by GCC to Limited Liability Partnerships (“LLPs”).  A number of female employees whose employment transferred to the LLPs in accordance with TUPE insisted on comparing themselves to male employees who were still directly employed by GCC for the purposes of equal pay claims.  GCC argued that the outsourced female employees could not compare themselves with male employees who remained employed by GCC directly.

The court rejected GCC’s argument and decided that the LLPs amounted to ‘associated employers’ for the purposes of the Equal Pay legislation.  It was also held that GCC was the “single source” responsible for pay inequality.  The employees’ equal pay claims will now proceed.

This is a significant decision for all concerned with equal pay.  It is great news for the claimants concerned in their pursuit for equality.  For employers who do engage in taking on outsourced business from local authorities, it serves as a reminder of the need to be fully aware of the risk of assuming liability for equal pay claims.

Jack Boyle
Solicitor – Employment Law

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