Existing transfer

Jackson v Computershare Investor Services plc

The 1981 Transfer of Undertakings (Protection of Employment) Regulations state that when employees are transferred from one employer to another, all their terms and conditions are protected. In Jackson v Computershare Investor Services plc, the Court of Appeal said that TUPE does not confer rights on employees that they did not have before the transfer.

Basic facts

In January 1999, Mrs Jackson became the finance Manager for CI(UK) Ltd. Her contract did not contain any enhanced redundancy or severance payment terms.

She then transferred over to CIS (an associated company) under TUPE in June 2004. Although it offered an enhanced severance scheme, it distinguished between those who “joined” (this word was critical) before 1 March 2002 and new entrants who joined after that date.

When she was made redundant in 2005, Mrs Jackson claimed she was entitled to the more generous package offered by CIS dating back to 1999.

Relevant law

Regulation 5 of TUPE states that:

" (1) A relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor in the undertaking or part transferred but any such contract which would otherwise have been terminated by the transfer shall have effect after the transfer as if originally made between the person so employed and the transferee.

(2) Without prejudice to paragraph (1) above ….on the completion of the relevant transfer-

(a) all the transferor's rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this Regulation to the transferee; and

(b) anything done before the transfer is completed by or in relation to the transferor in respect of that contract or a person employed in that undertaking or part shall be deemed to have been done by or in relation to the transferee."

Tribunal and EAT decisions

The tribunal said that CIS was wrong to try to impose the post-March 2002 provisions on Mrs Jackson.

Although she did not “join” CIS until 2004, she had been an employee of CI (UK) Ltd since 1999. As such, the effect of regulation 5 of TUPE was to render her contract as though she had been an employee of CIS since that date.

The EAT, however, disagreed. It “rejected the logic of Mrs Jackson's claim that everything in her contractual terms, which was in place once the variation of the contract was agreed, harked back to her commencement of employment in 1999”.

It said that the word "joined", as used in the severance provisions, meant "actually joined" CIS. In this case, that was at the date of Mrs Jackson’s transfer in June 2004.

Court of Appeal decision

The Court of Appeal agreed with the EAT. It said that although the aim of TUPE was to stop employees from being prejudiced as a result of a transfer, it was “not their objective to confer additional rights on the employee or to improve the situation of the employee”.

It concluded, therefore, that regulation 5(1) did “not give transferred employees access to employment benefits other than those to which the employee was entitled before the transfer of the undertaking”.

It said that the fact that CIS calculated Mrs Jacksons’ severance pay from 1999 was irrelevant to whether or not she was a new entrant to the severance scheme post March 2002. That question could only be decided by the date she actually joined CIS, not by applying regulation 5(1).