02/02/2026
The EAT handed down a EAT decision for NHS employers landed in Alpha Anne & Others v Great Ormond Street Hospital for Children NHS Foundation Trust. It’s a case that cuts right to the heart of outsourced workforces, TUPE transfers, and long‑running pay disparities.
Background
The Claimants were cleaners originally employed by OCS and working at GOSH. On 1 August 2021 the cleaning provision was brought in house to GOSH, and the Claimants’ employment transferred to GOSH under TUPE. The case concerned the pay disparity between those who transferred into GOSH, who were paid the London Living Wage and GOSH’s directly employed cleaning staff
The Claimants alleged indirect race discrimination on two bases:
- That GOSH indirectly discriminated in the period before the transfer by requiring OCS to set the minimum wage at the lower, London Living Wage rather than the more favourable Agenda For Change rates of pay. The Claim was made on the basis that at that time GOSH was a ‘principal’ and therefore was prohibited from discriminating against the Claimants under s41 Equality Act 2010.
- That GOSH indirectly discriminated in the period after the transfer by not immediately increasing the Claimant’s pay on transfer. They argued that the GOSH applied a Provision, Criterion or Practice (a PCP) that receipt of AfC pay depended on not having transferred from an outsourced contractor under TUPE.
Decision
The ‘pre-transfer’ claim failed on the grounds that s41 Equality Act 2010 did not apply to the facts. Whilst the Trust did require OSC to set a minimum rate of pay at the LLW, there was no finding that the Trust positively prohibited OCS from paying more than the LLW if it wished to. The EAT relied on a decision by the Court of Appeal in Royal Parks Ltd v Boohene which held that section 41 of the Equality Act 2010 was concerned with rights arising from the employer-worker relationship and not the principal-worker relationship.
In relation to the post transfer issue, the EAT accepted that the outsourced PCP applied, and that it disproportionately disadvantaged the those from a BAME. It was able to reach this conclusion because statistical data showed that 78% of contractor cleaners were from a BAME background whereas 51% of AfC‑graded GOSH cleaners were from a BAME background.
The EAT went consider GOSH’s justification defence. GOSH claimed that the PCP was justified because TUPE prevented it from making variations to contractual terms post-transfer. Whilst TUPE does void variations where the sole or principal reason is the transfer, the evidence was that the Trust had a contractual power to vary the claimants' terms from day one. On that basis it wasn’t contrary to TUPE to vary pay. The EAT found the Trust's approach to harmonisation disadvantaged many employees. Given the finding that the Trust had been dilatory in making changes, and that it could have varied the claimants' terms from day one, there was no objective justification for failing to apply AfC terms post-transfer.
Key take aways from the case:
- Pre-transfer protection is limited – NHS trusts cannot be liable for contract workers' pay claims, but this protection ends once workers transfer to direct employment.
- Post-TUPE risks are immediate – TUPE isn’t a shield for employers. Delays in harmonising terms after insourcing carry significant discrimination risk where statistical evidence shows disparate impact on protected groups. Pay parity is becoming a discrimination issue, not just an industrial one.
- Data matters. The EAT relied heavily on workforce composition statistics. NHS employers should expect similar scrutiny of demographic patterns in outsourced teams.
- Contractual variation clauses are critical – Pre-existing variation clauses can enable day 1 harmonisation without breaching TUPE restrictions.
- Phased harmonisation requires strong justification – Trusts must document robust objective justification for any delay in harmonising terms.
The decision will resonate across the NHS, where large numbers of estates, facilities, and support staff have moved between contractors and Trusts over the years.
Keeping an eye on the horizon - The Employment Rights Act 2025
ERA 2025 pushes public bodies toward pay parity and fair treatment of transferred staff. One of the core policy aims of the ERA 2025 is to prevent the creation of two‑tier workforces when services move between contractors and public bodies. The GOSH case shows exactly how those two‑tier structures become legally risky:
Outsourced workers were paid significantly less than directly employed staff doing the same work.
When they transferred back in‑house, the disparity persisted.
That disparity mapped onto race demographics.
The Trust could not justify maintaining it.
The reforms narrow the space for “TUPE as a defence” even further; exactly the argument rejected in GOSH. Under ERA 2025, public bodies will face stricter duties to review and rationalise terms when staff transfer in, greater transparency obligations around pay structures, and a reinforced requirement to consider equality impacts of inherited terms.
The EAT the GOSH case made it clear that TUPE does not prevent a public body from moving transferred staff onto its standard terms if the contract allows variation, and that TUPE does not justify maintaining a discriminatory disparity.
Equality impact becomes central to outsourcing decisions under ERA 2025. The reforms introduce:
i. Mandatory equality impact assessments for outsourcing and insourcing decisions.
ii. Ongoing monitoring duties for public bodies receiving transferred staff.
iii. A requirement to identify and mitigate disproportionate impacts on protected groups.
Under the ERA 2025, a Trust would be expected to spot this pattern before or immediately after transfer and take action.
The GOSH decision and the ERA 2025 reforms point in the same direction: NHS organisations must be proactive in identifying and eliminating structural inequalities created by outsourcing. TUPE is no longer a safe harbour and pay disparities that map onto protected characteristics will face intense scrutiny.
