2007 was the first full year of the brave new world ushered in by the 2006 Transfer of Undertakings Regulations (TUPE), but the most important court decisions still addressed the old regulations. Of these, two decisions stood out. Both were decided under the 1981 regulations, but the principles they establish apply equally to TUPE 2006.
In Hynd v Armstong the Court of Session (the Scottish equivalent of the Court of Appeal) ruled that a transferor dismissing staff prior to a TUPE transfer could not rely on the transferee's reasons for dismissal in order to avoid a claim for unfair dismissal. In this case the old employer had tried to rely on the new employer's reduced need for staff to dismiss employees who would otherwise have transferred over. The Court of Session said this dismissal was unfair because it related to the transfer, and the economic, technical or organisational (ETO) defence was not available because an ETO reason had to relate to the business of the employer at the time of dismissal.
Regent Security Services v Power is a decision of the Court of Appeal which introduces an exception to the general rule that transferred employees' terms and conditions can not be changed if this is for a reason connected with the transfer. The Court of Appeal said that because the TUPE regulations are designed to protect employers, this principle does not apply if the change the new employer has sought to introduce (in this case a later compulsory retirement age) is more favourable to the employee.