The High Court has handed down its judgment in Urenco UK Limited v Urenco UK Pension Trustee Company Limited and Others [2012] EWHC 1495. The case concerned employees who had transferred to a private sector employee Urenco under TUPE in 2008 where the individuals themselves were previously employees of the Nuclear Decommissioning Authority (NDA)
The TUPE transfer was covered by the Energy Act 2004 which provides that certain individuals transferred under TUPE should receive broadly comparable benefits.
Following the transfer, Urenco had sought had to amend the benefits by introducing higher employee contributions and reducing the pension increase rate for future accrual.
Urenco argued that the requirement under the Energy Act only applied to the point of transfer (and on any subsequent transfer) but did not apply during the term of the outsourcing contract.
The judge unsurprisingly found in favour of the employees, who argued that the Energy Act protected the benefit throughout the duration of the outsourcing contract. Therefore the fact that any receiving scheme had an amendment power that allowed such changes must be considered irrelevant for these purposes.
The case is a warning to any parties involved in transfers involving the Energy Act that the statutory protections prevent any reduction in the pension benefit during the term of the contract.
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