Précis - Does an employee's right to enhancements on early retirement and redundancy under an occupational pension scheme transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE")? The recent case of Procter & Gamble v. SCA ("P&G") provides us with some welcome clarification.

What? In this case, the High Court confirmed a right to enhanced benefits on early retirement and redundancy under a private sector occupational pension scheme does transfer under TUPE.

So What? It was held that receiving employers will only be responsible for the enhancement from the date of early retirement up until normal retirement date. However, until we have greater certainty about the judgment's practical application, receiving employers will still look for appropriate protections within sale and purchase agreements.

TUPE protects an employee's rights under their contract of employment on a business sale, so that the receiving employer must replicate those benefits. However, where an employee has a contractual right to "old age, invalidity and survivors' benefits" under an occupational pension scheme those benefits do not transfer. What had been unclear was whether enhanced benefits on early retirement or redundancy were caught by this exclusion.

In this case, the High Court confirmed a right to enhanced benefits on early retirement and redundancy under a private sector occupational pension scheme does transfer under TUPE.

It was held that receiving employers will only be responsible for the enhancement from the date of early retirement up until normal retirement date.

However, a number of practical points remain outstanding, including how to calculate the value of any enhancement to any early retirement or redundancy payments; and where the enhanced benefits are contingent upon consent being given under the scheme rules, who decides whether to give this consent (the former or current employer)?

The existence of these issues arising from the P&G decision, means appropriate protection should still be sought in sale and purchase agreements.

This will certainly not be the last word on the matter. The judgment may be appealed. Whilst we can now be somewhat more clear on the benefits that transfer under TUPE, until we have greater certainty about the judgment's practical application, receiving employers will still look for appropriate protections within relevant agreements.