Beneficial changes following a transfer can be enforced

A change to an employee’s terms and conditions of employment resulting from a TUPE transfer can be enforced if it is to the employee’s benefit, the Court of Appeal has held.

Mr Power’s employment contract specified that his contractual retirement age was 60. When the part of the business in which he worked was transferred to a new employer, he agreed to change his contractual retirement age to 65. But his new employer then forced him to retire at 60, so he claimed unfair dismissal.

Under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), changes resulting from a business transfer are unenforceable — and the employer argued that this meant Power could not enforce the change in his retirement age to 65.

But the Court of Appeal disagreed. Last month it upheld the EAT’s decision that Power did have a contractual retirement age of 65, meaning that his employer could not force him to retire at 60.

Holding that the purpose of the TUPE legislation was to safeguard the rights of employees when they transferred, not to prevent them from benefiting from new terms that they have agreed, the court said Power’s original right to retire at 60 had transferred — and he had also acquired a new right by agreement to retire at 65. When this happens, it added, the employee can choose between enforcing the transferred acquired right or the newly obtained right.

Regent Security Services Ltd v Power [2007] EWCA Civ 1188