MAT Pay Structures

A common issue that Multi-Academy Trusts face when growing is differences in the terms and conditions that can occur between different schools within the MAT.

This issue can present a number of practical and legal issues that need to be resolved.

How the issue occurs

It is well known that when a new school joins a MAT that those employees will be subject to a TUPE transfer and this will protect the pay and other terms and conditions when they join the new trust, except in certain circumstances.

Whilst most schools have broadly similar terms and conditions it is not unusual to find different terms in respect of pay, redundancy pay, shared parental pay etc. and therefore these can become an issue for MATs.

What problems does this cause

There are two primary issues that these differences can cause in MATs.

The first is practical. Organisationally having different staff on different terms and conditions can make management more complex and needs to be managed. It can also cause upset amongst staff members who realise they are on different terms and conditions.

However there is also a legal issue and that is one of Equal Pay. Under Equal Pay if there are a difference in the terms and conditions of staff and there are broadly differences in respect of the sex of the make up of those groups then potentially equal pay issues could arise. In a MAT situation this could easily occur for instance if you have a transferred Primary School which has less favourable terms and conditions compared to a Secondary School. As Primary Schools generally have a high proportion of female staff members compared to Secondary Schools an equal pay issue could arise.

There is however a potential defence to these claims, known as the Material Factor defence. This means if a MAT can show the reason for the pay discrepancy was not for a reason connected to the employees sex, then this is a defence.

The fact that an employee has transferred as a result of a TUPE transfer is potentially a reason for a material factor defence and this is well established in various pieces of case law. The key issue that needs to be established to ensure the material factor defence applies is that the reason is still the TUPE transfer and why the difference still exists. Therefore it is not a complete defence against Equal Pay claims.

Can the Terms and Conditions be changed

MATs can rely upon the material factor defence in any Equal Pay claims but they may want to try and mitigate the risk further by considering whether they can change the terms and conditions of staff.

In general any change to terms and conditions that occurs as a result of a transfer will subject to certain circumstances, be void. It is important to note there is no time limit to this, there is a myth that TUPE protection only lasts for 2 years but technically as long as the change is as a result of the transfer the protection exists.

The key situation where you can make a change in terms and conditions if you can show a technical, economic or organisational reason which also entails a change in the workforce.

What can entail a technical, economic or organisational reason can vary from case to case and in most circumstances it might be possible to find one of these "ETO" reasons that could justify a change to terms and conditions.

However the most problematic element is the second part of the test, that it must entail a change in the workforce. What this means in practice is that there either needs to be a change in staffing numbers of other changes such as where staff are based etc. Changing terms and conditions of staff will not normally entail a change in the workforce and so the change will usually not be valid.

If there was an ETO reason and there was a change in the workforce, then the MAT would need to go through a consultation with the staff members about the proposed changes to make them valid.

Other options?

There is an exception under TUPE in general where wholly beneficial changes made to the employees contract are valid. This means a MAT could take the most generous terms and conditions and ensure all staff have those benefits. However to be valid all changes must be beneficial, the MAT couldn't use the opportunity of making some staff benefits more beneficial but as a trade off make some less beneficial.

Another option to consider is to try and mitigate the issue by ensuring all new staff are hired under new terms and conditions. In this case it ensures long serving staff members who were subject to the TUPE transfer maintain their new terms and conditions but as new staff join or take on new roles etc. they will join under new terms and conditions meaning the group of those who have different terms and conditions will be reduced overtime hopefully mitigating the risk.

Conclusion

Overall MATs will generally have a defence against Equal Pay claims if they can show the reason was for a TUPE transfer but there are additional steps that could be considered to further protect themselves or mitigate the risks.