The tribunal in London has been hearing legal argument over whether lecturers should have been entitled to retain the terms and conditions of their old contracts after incorporation in 1993.
The two sides in the case, listed as Ralton and others versus Havering College, are backed by breakaway union the Lecturers Employment and Advice Action Fellowship and the Association of Colleges respectively.
At an earlier hearing in July, the tribunal heard evidence from lecturers at the Essex college - some of whom have refused to sign new contracts and have had no pay rise in six years as a result.
LEAF won two key concessions when lawyers for Havering agreed that colleges were "emanations of the state" and the change of control from local authority to corporation was a relevant transfer.
Both these concessions support LEAF's case that lecturers are afforded protection under European law on the Transfer of Undertakings and the Acquired Rights Directive. This would mean that employees cannot have their terms and conditions altered when the organisation they work for is taken over, unless there is a significant change in the economic, technical or organisational nature of the business.
This week's hearing will consider whether changes in contracts were related to the transfer of ownership of colleges, and if compensation is due.
On the opening day of the hearing, Eleanor Sharpston QC, representing the lecturers, said that this was "an exceptional case".
She said: "The main, and possibly the only, reason for the transfer from the LEAs to the corporations was the avowed intention to change the contractual basis on which employees are employed. But for the transfer, it would not have been possible to change the staff contracts."
Melanie Tether QC, for the college, will argue that by signing new contracts, lecturers were indicating their acceptance of the new terms and conditions.
A ruling is expected early in the new year. LEAF, which now has branches in nearly 80 colleges, estimates, that if the case is successful, compensation claims could run into millions of pounds.