In this case the ECJ explored the extent of the of the exclusion for old-age, invalidity or survivors’ benefits under the Directive.  (References to Articles in the Directive are to the current Directive].  This exclusion is set out in Reg 10 of TUPE

The Facts

Mrs Beckmann was employed as a quantity surveyor within the NHS. The body which employed her was transferred to DWM and her contract was taken over until she was dismissed for redundancy two years later. Whilst employed by the NHS Mrs Beckmann contributed to the NHS Superannuation Scheme and was entitled under Whitley Council terms to an early retirement lump sum and pension in the event of being made redundant.  A dispute arose as to whether, having transferred, the transferee, DWM, was required to pay the early retirement benefits.  DWM’s case was that these payments were old age payments and were within the exclusion.

Two questions were referred to the ECJ:

(1)    Is the employee’s entitlement to early payment of pension and retirement lump sum and/or to the annual allowance and lump sum compensation, a right to an old-age, invalidity or survivors’ benefit within the meaning of [Article 3(4)(a)]?

(2)    If and to the extent that the answer to Question 1 is no, is there an obligation of the transferor arising from the contract of employment, the employment relationship or the collective agreement within the meaning of [Article 3(4)] and/or [Article 3(3](requirement to honour collective agreements) which transfers by reason of the transfer of the undertaking and renders the transferee liable to pay the benefits to the employee upon dismissal?

The ECJ

The ECJ held that the exclusion of pension liabilities from a transfer under the Acquired Rights Directive did not apply to an early retirement pension payable in the event of redundancy. It answered the questions referred to it in this way:

Early retirement benefits and benefits intended to enhance the conditions of such retirement, paid in the event of dismissal to employees who have reached a certain age, such as the benefits at issue in the main proceedings, are not old-age, invalidity or survivors’ benefits under supplementary company or inter-company pension schemes within the meaning of [Article 3(3)] of the Directive.

On a proper construction of [Article 3], the obligations applicable in the event of the dismissal of an employee, arising from a contract of employment, an employment relationship or a collective agreement binding the transferor as regards that employee, are transferred to the transferee subject to the conditions and limitations laid down by that article, regardless of the fact that those obligations derive from statutory instruments or are implemented by such instruments and regardless of the practical arrangements adopted for such implementation.

It is clear from the judgment that exclusion for old-age, invalidity or survivors’ benefits is to be strictly interpreted.
Link to judgment