TUPE and pension rights: the Procter & Gamble case

In The Procter & Gamble Company v Svenska Cellulosa Aktiebolaget SCA the High Court considered to what extent early retirement liabilities pass on a business transfer under the business transfer regulations – the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

Although occupational pension scheme rights do not transfer under TUPE, this exception applies only to employees' rights to "old age, invalidity or survivors' benefits". As a result of two European Court (ECJ) cases in 2002 and 2003, Beckmann v Dynamco Whicheloe Macfarlane and Martin v South Bank University, some early retirement rights provided under a scheme will transfer because they fall outside the exception. But the ECJ judgments left considerable scope for doubt about the precise ambit of the benefits that transfer or do not transfer under TUPE. The Procter & Gamble case offers guidance on some of these grey areas.

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