Changes to contract

Case 1: The facts

Mr Power’s employment contract specified a contractual retirement age of 60. The part of the business in which he worked was transferred to a new employer, and he agreed to change his contractual retirement age to 65.

When Power’s new employer later forced him to retire at 60, he claimed unfair dismissal. But the employer argued that the change in his retirement age to 65 was unenforceable – it was a change to his terms and conditions resulting from a business transfer, and the law states that employees should transfer on their existing terms and conditions.

The Employment Appeal Tribunal (EAT) held that Power did indeed have a new contractual retirement age, meaning that he had been unfairly dismissed (see Workplace Report, February 2007). The employer appealed.

The ruling

Agreeing with the EAT, the Court of Appeal held that Power was entitled to claim a contractual retirement age of 65. Power’s original right to retire at 60 had transferred, but he had also acquired a new right by agreement to retire at 65; when this happens, the court said, the transferred employee can then choose between enforcing the transferred acquired right or the newly obtained right.

The court added that the purpose of the TUPE legislation is to safeguard the rights of employees when they transfer, not to stop them benefiting from new terms that they have agreed.

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