It means that employees transferred in a company acquisition can object to any contractual changes to their detriment, and can also require their new employer to fulfil any contractual elements which would be to their benefit.
It follows an appeal against an Employment Appeals Tribunal ruling in the case of Power v Regent Security Services.
Power took action after his employer forced him to retire at 60 rather than 65.
He had originally been employed on a contract that stipulated a contractual retirement age of 60. But following an acquisition, he agreed to a variation in his contract, to agree a retirement age of 65. However, Regent Security Services subsequently forced him to retire at 60.
When sued for unfair dismissal, the company attempted to argue that the contractual variation was invalid. The company claimed that because it was a change made by reason of the transfer and therefore contrary to the regulations then in force.
But the Court of Appeal ruled that the aim of both TUPE and the Acquired Rights Directive was to safeguard the rights of employees. Therefore, if an employment contract is varied post-transfer, the employee will be able to choose between his or her previous contractual term and the variation.