Call back for new
personal injury claims only

Leave your details to request a call back.

* Required fields

Name: *

Telephone No:*

What is it regarding:* New Personal Injury Claim Conveyancing Criminal Matter Employment Matter Wills Existing Case

Union member:* Yes No     

If you are a member of a trade union please select Yes otherwise please select No and then click Submit

Contents

Bend it like Beckmann
Subsidising low pay
Employment Rights Unit
Law must be changed to protect union rights
Time for European action
Sex and the City  

Bend it like Beckmann

Beckmann v Dynamco Whicheloe Macfarlane Ltd [2002] IRLR 578 ECJ

The pernicious pensions exclusion from TUPE protection has long been an issue for trade unions. Until the law is changed employees who transfer their employment in a TUPE transfer do not have the right to continue accruing comparable pension benefits in their new employment, although their accrued rights are protected. So says the Acquired Rights Directive, our own TUPE regulations and the Court of Appeal.

Article 3(3) of the Acquired Rights Directive excludes benefits relating to old age, invalidity or survivors' benefits under supplementary, company or inter-company pension schemes, from the general rule that in the event of a transfer of an undertaking the transferor's obligations arising from a contract of employment, employment relationship or collective agreement transfer to the transferee.

The Beckmann case tested the scope of the exclusion, in particular, section 46 of the General Whitley Council terms and conditions applicable in the NHS. In this UNISON test case Thompsons were instructed as the solicitors before the European Court of Justice. Section 46 provides for premature retirement with immediate payment of superannuation and compensation in three circumstances: dismissal for redundancy, retirement in the interests of efficiency of the service or premature retirement on organisational change. To qualify, staff must be between the age of 50 and retirement age. It is a valuable right to an immediate payment of pension based on actual years pensionable service from date of redundancy to normal retirement age plus early payment of a lump sum that would ordinarily be paid on retirement.

Katia Beckmann was transferred to Dynamco from a health authority under a TUPE transfer. When she was later made redundant by the Company she met the conditions under S.46, but her employer refused to make any S.46 payment. They claimed that her rights had not transferred under TUPE as they related to old age provision. Ms Beckmann challenged the decision, the case was referred to the European Court of Justice by the High Court and the ECJ has now ruled in her favour.

In a far reaching judgment the ECJ held that early retirement benefits and benefits intended to enhance the conditions of early retirement, paid in the event of dismissal to employees who have reached a certain age are not old-age, invalidity or survivors' benefits within Article 3(3) of the Acquired Rights Directive. Only benefits paid from the time when an employee

reaches the end of his normal working life as laid down by the general structure of the pension scheme in question can be classified as 'old-age benefits' falling within the exception allowed for by Article 3(3).

Given the general objective of the Acquired Rights Directive of safeguarding the rights of employees in the event of transfers of undertakings, the exception to Article 3(3), must be interpreted strictly. It can only apply to the benefits listed exhaustively in that

provision and must be construed in a narrow sense. It does not apply to early retirement benefits such as S 46 Whitley Council, even though the benefits are calculated by reference to the rules for calculating normal pension benefits. Nor did it matter that the S. 46 obligations derived from statutory instruments, are implemented by statutory instruments and regardless of the practical arrangements for implementation. The obligation arose from a contract of employment, employment relationship or collective agreement and therefore bound the employer.