Regent Security Services Ltd v Power

Under the Transfer of Undertakings (Protection of Employment) Regulations 1981, a transferred employee retains acquired contractual rights and cannot waive them because of the transfer. That protection does not prevent the transferee from conferring an additional right by agreement, even where the transfer is the reason for the variation. The employee may rely on either the preserved right or the additional right. The anti-contracting-out provision does not render such an additional right void, and the transferee cannot rely on it to avoid the agreed variation.

Mr Power was employed under a contract providing for retirement at 60. Following the transfer of the undertaking to Regent, he agreed to Regent’s staff terms, which provided for retirement at 65. The Employment Tribunal held that the variation was void under TUPE and that Mr Power could not pursue his unfair-dismissal claim. The Employment Appeal Tribunal, in EAT/0499/06, allowed his appeal, held that the variation was effective, and remitted the question of remedy. Regent appealed to the Court of Appeal. The central issue was whether TUPE prevented Regent from relying on the agreed retirement age of 65 because the variation was connected with the transfer.

1. Disposition. Mummery LJ dismissed Regent’s appeal and upheld the Employment Appeal Tribunal’s order. Mr Justice David Richards and Sir Paul Kennedy agreed. Regent was ordered to pay Mr Power’s agreed appeal costs of £31,842.58 including VAT.
2. Protective construction. The purpose of the Acquired Rights Directive and the Transfer of Undertakings (Protection of Employment) Regulations 1981 is to safeguard employees’ acquired rights on a transfer, not to safeguard the transferred employer’s rights. TUPE must, where possible, be interpreted consistently with that protective purpose and with the Directive.
3. Preserved and additional rights. Regulation 5 transfers the employment contract and the transferor’s rights, powers, duties and liabilities to the transferee. Mr Power therefore retained the acquired right to retire at 60, which could not be waived by agreement made on the transfer or because of it. The later agreement with Regent did not remove that right. It conferred an additional right to continue working up to 65, which Mr Power was entitled to enforce. He could choose between relying on the transferred right and relying on the additional right.
4. Regulation 12. Regulation 12 renders void an agreement purporting to exclude or limit the operation of Regulation 5. The agreement providing for retirement at 65 did not contract out of, exclude or limit Mr Power’s acquired right to retire at 60. Regulation 12 was therefore unavailable to Regent and did not permit it to avoid the variation or resile from its own agreement.
5. Authorities. Daddy’s Dance Hall [1988] IRLR 315 and Credit Suisse First Boston (Europe) Limited v Lister [1998] IRLR 700 establish or apply the principle that an employee cannot waive mandatory acquired rights, even where compensating benefits are provided. They did not support Regent’s broader contention that the employee could not enforce an additional benefit conferred after the transfer.

• Court of Appeal (Civil Division): In [2007] EWCA Civ 1188, Regent’s appeal was dismissed and the Employment Appeal Tribunal’s order was upheld.
• Employment Appeal Tribunal: In EAT/0499/06, the appeal was allowed. The agreed retirement age of 65 was held effective and the matter was remitted to the Employment Tribunal on remedy.
• Employment Tribunal: The decision registered on 7 July 2006 held that the variation was void and that Mr Power could not pursue his unfair-dismissal claim based on dismissal at 60.