Jackson v Computershare Investor Services Plc

Under the Transfer of Undertakings (Protection of Employment) Regulations 1981, regulation 5(1) preserves existing contractual rights and continuity of service on a transfer. It does not confer benefits which were unavailable before the transfer. Where a later contractual scheme distinguishes employees by when they joined the transferee, eligibility is determined by the factual date on which employment with the transferee began. Deemed continuity may affect service-based calculations, such as redundancy or notice, but does not alter the ordinary meaning of eligibility terms. The appeal was dismissed.

The appellant’s employment transferred from Ci (UK) Ltd to Computershare Investor Services Plc in June 2004. Her original contract contained no enhanced severance provision, but the transferee operated a scheme offering more favourable terms to employees who had joined before 1 March 2002. The Employment Tribunal upheld her claim for enhanced severance pay, treating her deemed continuity from 1999 as making her a pre-2002 joiner.

The Employment Appeal Tribunal allowed the employer’s appeal, holding that Transfer of Undertakings (Protection of Employment) Regulations 1981 did not alter the contractual meaning of joining the transferee: UKEAT/0503/06/CEA. The central issue before the Court of Appeal was whether regulation 5(1) required the claimant to be treated as a pre-2002 joiner for the later severance scheme.

Mummery LJ delivered the judgment, with Maurice Kay and Wilson LJJ agreeing. The appeal was dismissed and the EAT’s decision was upheld.

1. The ET’s finding that the claimant joined the transferee when the undertaking transferred in June 2004 was a finding of fact and was plainly correct. On the ordinary and natural meaning of the severance terms, she was therefore a new entrant after 1 March 2002.
2. The purpose of Transfer of Undertakings (Protection of Employment) Regulations 1981 and the Acquired Rights Directive 2001/23/EC is to safeguard employees’ existing rights when an undertaking changes employer. Regulation 5(1) substitutes the transferee for the transferor and preserves the prior contractual rights and obligations as if the employment relationship continued with the transferee. It does not improve the employee’s position or confer access to benefits to which the employee was not entitled before the transfer. This approach was consistent with Power v. Regent Security Services Ltd [2007] ICR 970 and Viggosdottir v. Islandspostur HF [2002] IRLR 425.
3. Deemed continuity of service may be relevant to calculations of redundancy or severance payments, notice periods and qualifying periods. It does not determine whether an employee falls within a later contractual category defined by the date of joining the transferee.
4. The Court of Justice authorities cited on Article 3(1), including Molle Kro [1989] ICR 330, Daddy’s Dance Hall [1988] IRLR 315, P Bork International [1989] IRLR 41 and Collini and Chiappero v. Telecom Italia spa [2000] IRLR 788, did not assist the argument. TUPE could not be used contextually to transform a post-2002 entrant into a pre-2002 joiner. The EAT had correctly allowed the employer’s appeal.

1. Court of Appeal (Civil Division) dismissed the claimant’s appeal and held that the EAT had correctly allowed the employer’s appeal: [2007] EWCA Civ 1065.
2. Employment Appeal Tribunal allowed the employer’s appeal against the Employment Tribunal’s decision, holding that the claimant was an actual post-2002 entrant under the severance scheme: UKEAT/0503/06/CEA.
3. Employment Tribunal upheld the claimant’s unfair dismissal claim and her claim for enhanced severance pay. The unfair dismissal issue was not appealed.