EAT CONTRACT OF EMPLOYMENT – Incorporation into contract
TRANSFER OF UNDERTAKINGS – Pensions and other terms
In this test case, the Claimant started his employment with Birmingham City Council on 29 July 1971. In 1993, the Council and its recognised trade unions entered into a collective agreement relating to redeployment and redundancy. By clause 3.2 it was provided that in respect of employees who were made voluntarily redundant the Council ‘will in exercising its discretion in accordance with the Superannuation Regulations award at least 5 added years’. This provision was contained in the Council’s Personnel Handbook.
By regulation 8(1) of the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2000, it was provided that ‘an employing authority may award a credited period to an eligible person’.
On 2 April 2001, the Claimant’s employment was transferred under TUPE to Serviceteam. The Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2006 repealed the 2000 regulations The power to award ‘credited period’ was abolished and it was replaced by a power to award a lump sum payment up to a maximum of 104 weeks’ pay.
In about December 2006, the Claimant’s employment was transferred under TUPE from Serviceteam to Morrison Plc. On 1 April 2008 the employment of the Claimant was transferred under TUPE from Morrison Plc to the Respondents.
The Claimant applied for voluntary redundancy and his offer was accepted but the Respondents stated they did not have any discretion to award ‘added years’ under the applicable super-annuation regulations as the statutory discretion to award it under clause 3.2 had been removed by the 2006 regulations.
The Employment Tribunal held that:-
(a) the clause 3.2 term was incorporated by reference into the Claimant’s contract of employment;
(b) the phrase ‘added years’ in clause 3.2 was understood by the unions, the employers, the employees, the pension fund and the Government to be the same as the statutory concept of ‘credited period’ referred to in the 2000 regulations;
(c) the ability to award a credited period in the case of a voluntary redundancy was removed by the 2006 regulations; and
(d) the Respondents were correct in that they had no obligation or a discretion to grant the ‘added years’ referred to in clause 3.2.
Held: The appeal of the claim was dismissed because:-
(a) each of the conclusions of the Employment Tribunal was correct save that clause 3.2 was not incorporated into the Claimant’s contract of employment;
(b) the decision of the Court of Appeal in Parkwood Leisure Limited v Alemo Heron  IRLR 298 and the decision of the European Court of Justice in Werhof v Freeway Tram System GmbH and Co  IRLR 400 stating that the rights of the parties under collective agreements had to be looked at the time of the transfer did not mean that subsequent statutory changes could be ignored. Indeed the 2006 regulations had to be taken into account and they showed that any rights under clause 3.2 were abolished by the 2006 regulations; and
(c) the Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007 do not resurrect any rights under clause 3.2 because they deal with a different regime from that covered by clause 3.2 which has been abolished by the 2006 regulations.
 UKEAT 0521 – 09 – 0907
Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007, Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2006
England and Wales
Cited – Hans Werhof v Freeway Traffic Systems GmbH and Co. KG ECJ 9-Mar-2006
The claimant’s employment was covered by a framework collective agreement and a wage agreement specific to his industry. The business was transferred to the defendant, who was not part of such schemes. An arrangement was proposed to vary his . .
Cited – Parkwood Leisure Ltd v Alemo-Herron and 23 Others CA 29-Jan-2010
The employees asserted unauthorised deductions from their wages. The company appealed against an order re-instating their claims. When employed by the council, the claimants had the right to pay increases in accordance with rates set by national . .
Lists of cited by and citing cases may be incomplete.
Employment, Local Government
Updated: 06 February 2022; Ref: scu.420759