Worrall & Ors v. Wilmott Dixon Partnership Ltd & Anor

A term in a collective agreement is not incorporated into an employee’s contract merely because the relevant handbook was available, a later employer referred to the policy, or the employer did not dispute the employee’s assertion of entitlement. Incorporation requires evidence that the employee agreed to be bound.

Rights preserved on a transfer under TUPE are not immune from subsequent statutory change. The repeal of the statutory power underlying an early-retirement benefit can therefore remove any corresponding contractual entitlement. A later pension regime providing augmentation does not revive a distinct right to added years where the two schemes serve different purposes.

The claimant was originally employed by Birmingham City Council and was subsequently transferred through several transactions under the Transfer of Undertakings (Protection of Employment) Regulations 1981. A 1996 collective agreement stated that, on voluntary redundancy, the Council would exercise its discretion under the superannuation regulations to award at least five added years.

The Employment Tribunal held that the term was incorporated into the claimant’s contract, that added years meant the credited period under the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2000, and that the right was removed by the 2006 Regulations. The Employment Appeal Tribunal considered whether incorporation had been established, whether rights were fixed at the first transfer, and whether the 2007 pension regulations preserved the benefit.

1. Incorporation. The appeal was dismissed. The Employment Tribunal’s finding that clause 3.2 was incorporated was set aside. Availability of the Personnel Handbook did not establish that the claimant had received or agreed to its terms. A general reference to the policy in a transfer letter did not satisfy incorporation by reference. Nor did the respondents’ failure to dispute the claimed entitlement establish contractual agreement.
2. Effect of later legislation. The reasoning in Parkwood Leisure Limited v Alemo Heron [2010] IRLR 298, following Werhof v Freeway Tram System GmbH & Co [2006] IRLR 400, concerned future changes to collective agreements. It did not permit a transferee to disregard subsequent statutory provisions. The 2006 Regulations repealed the 2000 Regulations and removed the statutory power to award a credited period. Since added years were understood to mean that credited period, any corresponding right under clause 3.2 ceased to have effect.
3. 2007 Regulations. The Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007 dealt with augmentation, a different pension mechanism commonly used for recruitment or retention, rather than added years used in voluntary-redundancy programmes. They therefore provided no basis for reviving the abolished benefit.
4. Mr Pountney’s new complaints concerning consultation and additional evidence could not be raised for the first time on appeal. The appeal was accordingly dismissed.

• Employment Tribunal: dismissed the claimant’s breach-of-contract claim, holding that clause 3.2 was incorporated, that added years meant a credited period, and that the benefit had been removed by the 2006 Regulations.
• Employment Appeal Tribunal: allowed the respondents’ challenge to the incorporation finding but dismissed the appeal overall, holding that the claim failed in any event because the statutory benefit had been abolished.