TRANSFER OF UNDERTAKING

Power v Regent Security Services Ltd

EAT: Elias J (President), Mr D Bleiman and Sir Alistair Graham: 29 January 2007

The claimant, an estate manager, had a contractual retirement age of 60 when he was told that all or part of the estate for which he was responsible was likely to be redeveloped and that he would be retired in connection with that redevelopment, which it was envisaged would be after his 60th birthday. In July 2005 the claimant's employment transferred to the respondent employers, and the claimant's contractual retirement age was changed to 65. He was dismissed when he reached 60 and made a claim of unfair dismissal. The employment tribunal found that the change to his contractual retirement age to 65 was contrary to regulation 5(2)(a) of the Transfer of Undertakings (Protection of Employment) Regulations 1981 and, consequently, void under regulation 12. The tribunal concluded that the claimant's contractual retirement date was at age 60; that, as the claimant was in a unique position, that was his normal retiring age for the purposes of section 109(1) of the Employment Rights Act 1996; and that, accordingly, it had no jurisdiction to hear his claim.

The claimant appealed.

The Employment Appeal Tribunal held:
As an employee in a unique position, the claimant's contractual retirement age was his "normal retiring age" for the purposes of section 109(1) of the Employment Rights Act 1996. Given that it was not contended that his contract with the transferor had been varied so as to specify that his retirement would take effect on the proposed redevelopment, at the time of the transfer, his contractual retirement age was 60. There was, however, no reason why the claimant should be barred from relying on the amendment of his contractual age to 65 on the transfer. It was not necessary, and would be inconsistent with the aim of protecting the workforce and the principle that employees should not be prejudiced as a result of a transfer, to construe regulation 12 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 so as to prevent an employee from seeking to take the benefits of a contract varied with the transferee. Accordingly, the claimant's "normal retiring age" was his new contractual retirement age of 65 and the tribunal had jurisdiction to hear his claim.

Per curiam. If an employee wishes to rely on a term originally found in the agreement with the transferor rather than relying on a term in the varied agreement with the transferee, he will be entitled to do so. It is not a question of whether objectively viewed the original term is more beneficial or not. It is simply a question whether the employee wishes to rely on it. If he perceives it to be beneficial to seek to rely on the original term, he can do so in preference to the inconsistent later term.

The appeal was allowed.

Appearances: Rad Kohanzad, representative (Free Representation Unit), for the claimant; Paul Housego, solicitor (Beers, Kingsbridge), for the employers.