MR M D POWER v REGENT SECURITY SERVICES LTD [2007] UKEAT 0499_06_2901

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2007] UKEAT 0499_06_2901Case No Appeal No. UKEAT/0499/06Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR M D POWERAPPELLANTREGENT SECURITY SERVICES LTDRESPONDENT
Before
Mr Justice EliasSir Alistair Graham KbeDate 29 January 2007
[1]APPEARANCES For the Appellant Mr Rad Kohanzad (a Representative) Instructed by: Free Representation Unit 6th Floor 289-293 High Holborn LONDON WC1V 7HZ For the Respondent Mr Paul Housego (Solicitor) Instructed by: Messrs Beers Solicitors 29 Fore Street KINGSBRIDGE Devon TQ7 1AA SUMMARY Transfer of Undertakings – Acquired rights directive The appellant was employed to manage a particular estate under a contract which stipulated that his contractual retirement age was 60. The part of the business in which he was employed was transferred. He was in a unique position; no-one else was transferred. He agreed with the respondent transferee to a change in his contract which stipulated that the contractual retirement age would be 65. There was no other contractual alteration. There was also evidence that he had been told that he would not in fact be retired until the property for which he was responsible was redeveloped, and that this would be sometime after his 60 th birthday. In fact the respondent sought to compel him to retire on his 60 th birthday. He brought a claim for unfair dismissal, but the respondent contended that 60 was the normal retirement age and since he had reached that age he was precluded from pursuing that claim by section 109 of the Employment Rights Act 1996 . The appellant contended that the normal retirement age was 65, either because of the contractual variation, or because even if the contractual retirement age was 60, he had an expectation that he would not be retired until redevelopment, and that since this did not identify any specific age, the default age of 65 should apply in accordance with section 109. The respondent alleged that the contractual variation was invalid because it was a change made by reason of the transfer; and that for an employee in a unique position, the normal retirement age was the contractual retirement age. The Employment Tribunal accepted both these submissions. On appeal, the EAT accepted that if the variation were void, then the Tribunal was right to find that the normal retirement age was the contractual retirement age and had not been altered by any contrary expectation. However, the EAT held that the contractual retirement age had been varied to 65, and that there was no reason why that should not be enforced by the employee. The variation was for his benefit, and the case of Daddy's Dance Hall [1988] IRLR 355 did not prevent such a variation being valid and effective. Nor was it necessary to construe regulation 12 of the Transfer of Undertakings Regulations so as deny the appellant the right to rely on this change. A transferee employer, unlike an employee, cannot invoke either the case law of the ECJ or regulation 12 to escape contractual obligations he has voluntarily undertaken, even where they are the result of a variation in the contract which is by reason of the transfer. In the event, the appeal was allowed. THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT) The Employment Tribunal sitting in London Central held that the appellant could not pursue a claim for unfair dismissal because he had reached his normal retirement age of 60 by the time he was dismissed, and therefore he was excluded from making the claim by reason of s.109 of the Employment Rights Act 1996 . This aspect of the case is of limited legal significance, given the fact that the section has now been repealed by the Employment Equality (Age) Regulations 2006 , sched.8, para 25 as from 1 October 2006. However, the case also raises the important issue of whether an employee can enforce variations of a contract of employment made with the transferee on or around the time of the transfer of an undertaking and by reason of the transfer. The background[2]The facts can be briefly summarised. The appellant was first employed by Capital & Counties plc in 1985. He had responsibility for the management of properties at the Halkins' Estate in London. At that stage his contract stipulated that his normal retirement age was 65.[3]In 1997 his contract was transferred to the Benchmark Group plc and in 2000 he consensually agreed to a change in his contractual retirement age to 60.[4]There was a further transfer to ISG Occupancy Limited when the facilities management requirements of Benchmark were outsourced. This was in 2003. The contractual retirement age remained at 60 under that contract.[5]ISG then outsourced its facilities management requirements and again the appellant was transferred, this time to the respondent, with effect from 1 July 2005. As with the earlier transfers, this transfer fell within the scope of the Transfer of Undertakings (Protection of Employment) Regulations 1981. (The new 2006 Regulations, which have replaced the 1981 Regulations, were not in force at any material time.)[6]There was evidence before the Tribunal that whilst the appellant was with ISG he had been told that the part of the estate for which he was responsible was likely to be redeveloped in the foreseeable future and that he would be retired in connection with that redevelopment. It was envisaged that this would occur on an indeterminate date after his 60 th birthday. The Tribunal decision itself does not make clear whether the same indication had been given to him by the respondent after the transfer, but Mr Housego, who ably represented them before us, conceded that there was at least a common understanding that this might occur.[7]On 26 June 2005, shortly before the transfer took effect, the respondent sent the appellant a letter offering him employment. As the Tribunal noted, the employment would be transferred automatically under the Regulations in any event and the letter was purporting to offer a position to which the appellant was already entitled. The effect of that letter was ostensibly to alter the contractual retirement age. What the letter in fact said was that the appellant's employment would terminate automatically, without notice, at the age of 65. Although the words 'retirement' or 'retire' were not used, the Tribunal interpreted this to be fixing the retirement age, and there is no appeal from that conclusion. An important feature of the case is that it was common ground before the Employment Tribunal, as it was before us, that the variation was by reason of the transfer.[8]On 1 September 2005 the respondent notified the appellant that they were intending to retire him on his 60 th birthday, which was 19 November 2005. They wanted to distribute his functions amongst other members of staff. The appellant contended that his contractual retirement age was 65, based on the contract that he had received and signed, and he objected to his dismissal. But it took effect and he was paid up until the end of November. He contended that he had been unfairly dismissed.[9]The preliminary matter for the Tribunal to consider was whether on these facts he had already reached the normal retirement age or not. If he had, then he could not pursue his unfair dismissal claim. The Tribunal concluded that he had; but that if he had not, and was eligible to bring the claim, they would have found that his dismissal was by reason of redundancy but was automatically unfair pursuant to s.98A(1) of the Employment Rights Act 1996 because of a failure to comply with the statutory procedures set out in the Employment Act 2002 . They did not consider, and did not hear argument on, what the remedy would have been had they considered that they had jurisdiction to hear the claim. The Law[10]Before dealing with the legal arguments, it is necessary to set out the relevant statutory material, as well as the pertinent case law.[11]Section 109 of the Employment Rights Act 1996 is as follows:- "(1) Section 94 does not apply to the dismissal of an employee if on or before the effective date of termination he has attained –(a) in a case where – (i) in the undertaking in which the employee was employed there was a normal retiring age for an employee holding the position held by the employee, and (ii) the age was the same whether the employee holding that position was a man or a woman, that normal retiring age, and(b) in any other case, the age of sixty-five. This provision has been the subject of extensive case law, but for the purposes of this appeal it is necessary to refer to only two cases.[12]In Waite v Government Communications Headquarters [1983] IRLR 341 the House of Lords had had to consider how to determine the normal retirement age. This was, however, in the context of a large group of employees holding the same position as the employee; it was not a case where he was in a unique position. The leading judgment was given by Lord Fraser of Tullybelton, (Lords Keith, Scarman, Bridge and Templeman concurring). He noted that there is a presumption that the contractual retiring age is the normal retiring age for the group but said that it could be rebutted by evidence that there was in practice some higher age at which employees retired, and which they could reasonably regard as their normal retirement age. He then added this (para 14): "Having regard to the social policy which seems to underlie the Act - namely the policy of securing fair treatment, as regards compulsory retirement, as between different employees holding the same position – the expression 'normal retirement age' conveys the idea of an age at which employees in the group can reasonably be expected to be compelled to retire, unless there is some special reason in the particular case for a different age to apply".[13]The second case is the decision of the Court of Appeal in Wall v British Compressed Air Society [2004] IRLR 147 . The facts were that the employee, who was director general of the Society, had a contractual retirement age of seventy. It was accepted that he was in a unique position, as was Mr Power. He was dismissed after he had reached the age of sixty-five but before his contractual retirement age.[14]He presented a claim for unfair dismissal but the Employment Tribunal held that since he was in a unique position there was no normal retirement age and the statutory alternative of sixty-five applied. Accordingly, it concluded that he could not take his claim for unfair dismissal.[15]The EAT allowed the appeal and the Court of Appeal by a majority (Simon Brown and Scott Baker LJJ; Mr Justice Evans Lombe dissenting) upheld the decision of the EAT and concluded that there was no reason why an employee in a unique position could not have a normal retirement age within the meaning of s.109. In the course of giving judgment Lord Justice Simon Brown said this (para 6): "I should immediately note that in the case of a unique employee (as for convenience I shall call an employee whose position is not comparable to that of any other employee within the undertaking) the only candidate for a 'normal retiring age' is, assuming his contract of employment provides for it, his contractual retiring age. A similar observation was made by Scott Baker LJ at para 29.[16]Certain provisions of the Transfer of Undertakings (Protection of Employment) Regulations 1981 are also material. These Regulations gave effect to the EC Directive 77/187/EEC , known as the Acquired Rights Directive . (That Directive was amended in 1998 and consolidated into a new Directive in 2001.[17]The 2006 Regulations give effect to the changes effected in that Directive.) They were passed under powers conferred by s.2(2) of the European Communities Act 1972 which enables the Minister to introduce subordinate legislation for the purpose of giving effect to rights and obligations under Community law.[18]It is trite law that the regulations must be interpreted so as to give effect to the Directive and the decisions of the European Court of Justice: see Litster v Forth Dry Dock & Engineering Co. Ltd [1989] IRLR 161 . It is also well established that the purpose of the Directive is, as one of the recitals makes clear "to provide for the protection of the employees in the event of a transfer, in particular to ensure that their rights are safeguarded".[19]Not surprisingly, substantially similar language has been adopted by the European Court of Justice itself. For example, in P. Bork International v Foreningen af Arbejdsledere [2001] IRLR 41, para 13 the Court stated that:
" ..the objective of Directive 77/187 is to ensure that employees' rights are safeguarded in the event of a change of employer and to allow them to remain in the employment of the new employer on the same conditions as those agreed with the transferor."
The focus is therefore on the protection of employees.[20]As Clarke L J (as he was) observed in Credit Suisse First Boston (Europe) Ltd v Lister [1998] IRLR 700 at para. 16, after having cited a number of decisions of the European Court including Foreningen af Arbejdsledere i Denmark v Daddy's Dance Hall A/S [1988] IRLR 355; Knud Wendelboe v LJ Music PS in liquidation [1985] ECR 457, [1985] ECR 2639 , Landsorganisationen i Denmark for Tjenerforbundet i Denmark v Ny Molle Kro [1987] ECR 5465; [1989] IRLR 37; Foreningen af Arbejdsledere i Danmark v A/S Danmols Inventar in liquidation [1985] ECR 2639 ; and Rask v ISS Kantineservice A/S [1993] IRLR 133:
"those cases contain many statements to the effect that the purpose of the Directive is to ensure that a transfer of business 'has no prejudicial effects' on the employees of the transferor and that it 'does not subject them to less favourable treatment."
[21]The following Regulations are material to this case: 5 Effect of relevant transfer on contracts of employment, etc(1) Except where objection is made under paragraph (4A) below, a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor in the undertaking or part transferred but any such contract which would otherwise have been terminated by the transfer shall have effect after the transfer as if originally made between the person so employed and the transferee.(2) Without prejudice to paragraph (1) above, but subject to paragraph (4A) below, on the completion of a relevant transfer – (a) all the transferor's rights, powers, duties and liabilities under or in connection with any such contract, shall be transferred by virtue of this Regulation to the transferee; and (b) anything done before the transfer is completed by or in relation to the transferor in respect of that contract or a person employed in that undertaking or part shall be deemed to have been done by or in relation to the transferee. 12 Restriction on contracting out Any provision of any agreement (whether a contract of employment or not) shall be void in so far as it purports to exclude or limit the operation of Regulation 5, 8 or 10 above or to preclude any person from presenting a complaint to an employment tribunal under regulation 11 above."[22]An important issue in this case is the extent to which the transferee and the employee can agree between themselves to vary the contract and thereby change the post-transfer terms.[23]The issue arose for consideration in the Daddy's Dance Hall case. The facts were that a Mr Terrup was dismissed by the transferor. He entered into a new contract with the transferee which differed in many respects from the previous contract. His remuneration was changed, and at his request a three-month trial period was specified but with either party being able to give 14 days' notice during that period. The employers chose to exercise that right. He contended that the 14 day period was not binding and that he was entitled to the longer period which had been provided under his old contract. The Court making the reference posed the relevant question to be determined in the following terms:
"Can a worker who concludes a contract with a purchaser of an undertaking at that point waive the rights conferred upon him by the Directive if this allows him to obtain such advantages that the change in conditions of employment does not place him overall in a less favourable position?"
[24]The ECJ held that he was not bound by the less favourable term and could rely upon the original contract which had been transferred under the Acquired Rights Directive . The Court said this (paras 14-15):
"As has been stressed above, Directive 77/187 aims at ensuring for workers affected by a transfer of undertaking the safeguarding of their rights arising from the employment contract or relationship. As this protection is a matter of public policy and, as such, outside the control of the parties to the employment contract, the provisions of the Directive, in particular those relating to the protection of workers against dismissal because of transfer, must be considered as mandatory, meaning that it is not permissible to derogate from them in a manner detrimental to the workers. It follows that the workers concerned do not have the option to waive the rights conferred on them by the Directive and that it is not permissible to diminish these rights, even with their consent. This interpretation is notwithstanding the fact that, as in the instant case, the worker, to offset disadvantages arising for him from a change in his employment relationship, obtains new advantages so that he is not, overall, left in a worse position than he was before."
[25]The Court went on to emphasise that the Directive only achieved partial harmonisation and that provided the rights it conferred were safeguarded, it was thereafter for the national law to determine to what extent contractual variations effected between the transferee and the employee would be valid.[26]A similar issue arose in the Credit Suisse case. The employee in that case was employed by Barclays Zoete Wedd Services (BZW) as part of its European equity business. His terms included a 12-month restriction on soliciting clients and employees but there was no covenant preventing him taking up employment with a competing organisation. Credit Suisse acquired the relevant part of BZW's undertaking. It entered into a new contract with Mr Lister under which over a period he was to receive shares to the value of £625,000 as part of what was termed a 'retention reward'. The terms of that scheme also included a three month restriction on his engaging in competitive activity in the event of voluntary resignation. There was a consideration of £2,000 specifically related to that clause.[27]Following the takeover Mr Lister, having entered into that agreement, sought to take up work with Kleinwort Benson and he wished to be free of the three month restriction. Credit Suisse sought an interlocutory injunction to prevent him from acting in breach of the agreement he had made with them. It was common ground that in accordance with the decision of the Court of Appeal in Lansing Lind Ltd v Kerr [1991] IRLR 90, the plaintiff had to show that it was more likely than not that he would succeed at trial. Mr Justice Moore-Bick refused the application for the injunction on the grounds that the plaintiff would not be likely to succeed.[28]The employers argued in this case that the situation was different from that in Daddy's Dance Hall because there the overall position of the employee had remained at best neutral whereas in this case the new terms were plainly more favourable to him.[29]The Court of Appeal agreed with Moore-Bick J that there was no logical reason for distinguishing the two situations: if the employee was not fixed with the new contract when overall the compensating benefits resulted in a neutral outcome, the result should be no different where they resulted in a more favourable outcome from the employee's point of view. The Court of Appeal approved the following passage from the judge's decision (para. 24): "In my view, the effect of the decision in the Daddy's Dance Hall case is that by virtue of the Directive (and hence also reg. 5) the transfer of an undertaking inevitably results, as far as the employee is concerned, in the transfer of all the rights he enjoyed in connection with his relationship with the transferor of the undertaking to his new relationship with the transferee and that any agreement he may enter into with the transferee relating to the transfer is ineffective in so far as it purports to diminish those rights . There is nothing to prevent the transferee from subsequently varying the contract with the employee's consent, subject to any restrictions imposed by national law, provided that it is not consequent upon the transfer. That in my view is reflected in the inclusion of the word "powers" in reg. 5."(Italics added.) The italicised words are consistent with the general statements of the objective of the Directive found in other cases.[30]The Court of Appeal noted that there were a number of issues which had still not been determined by Daddy's Dance Hall . These included the following (para.39):
"whether in any case where an employee is deprived of a particular right by the new contract the whole new contract is void, leaving the old contract in place; whether the employee is entitled to the benefit and its rights under both contracts or whether he is entitled to his rights under the new contract, provided they are severable from that part of the contract which would (but for the effect of the Directive) deprive him of his rights under the old contract; whether the employer is entitled to say that the new contract is void in any respect, or whether that is an argument which can only be advanced by the employee on the ground that the Directive and the regulations are solely for his benefit; and what, if any, role principles of estoppel or change of position can play in the circumstances in which the new contract has been partly or wholly performed."
[31]This case raises squarely one of the issues left open in Credit Suisse , namely whether the employer can seek to resile from the agreement that he has made by successfully arguing that a contract voluntarily entered into by reason of the transfer is void and cannot be relied upon by either party. The issues in the case.[32]We turn to consider the two issues arising in this case. The expectation argument.[33]The appellant advanced two arguments before the Tribunal to support the contention that his normal retirement age was 65. The first was based on the premise that he could not rely upon the purported change to a contractual retirement age of 65. He accepted that in that event his contractual retirement age had remained at 60 even after the transfer, but he contended that nonetheless, and even though he was in a unique position, his normal retirement age was higher.[34]The argument was essentially as follows: Wall shows that there can be a normal retirement age for an employee who is in a unique position, as is this employee; Waite establishes that the normal retirement age is the age at which the employee could reasonably expect to be retired. He submits that since the employee had been told that he would continue until redevelopment then the normal retirement would be when that event occurred. Since that event is not at any specifically ascertainable date and therefore no precise age can be identified, the fall back of sixty-five applies. The employee has not reached that age and therefore was eligible to pursue his claim.[35]The Tribunal considered that argument and they rejected it in the following terms:
"Mr Kohanzad for the Claimant submitted that the presumption of the contractual retirement age being the normal retirement age was rebuttable, and that it was rebutted here because the Claimant had the expectation of being employed until the property was redeveloped. We accept Mr Housego's submission that any indication that retirement was to be postponed until an unknown date when possession of the Claimant's flat was required in connection with the redevelopment of the properties, does not prevent the contractual retirement age from being the normal retirement age. He pointed out that that was an event at which one was looking, rather than an age. In our judgment it is necessary to find as a fact that there was a defined age which was a normal retirement age for the purposes of section 109, rather than an event which would (or indeed only may occur) at an undefined date."
[36]Mr Kohanzad, who acts for the Free Representation Unit and to whom we are grateful for representing the appellant before us, submits that this is in error. It is true that there must be a defined age, but that is not inconsistent with the default age of 60 applying.[37]Mr Housego supports the Tribunal analysis not only for the reasons it gave but also on the ground that it would be unjust if the appellant were entitled to continue until the terminating event and still be able to claim redundancy payments on the ground that he had not reached his normal retirement age.[38]We accept that the Tribunal's reasoning is not wholly satisfactory. No doubt the normal retirement age must be a defined age rather than an event, as the judgment of Simon Brown LJ indicates, but that would not preclude the fall back age of sixty-five being adopted. Moreover, the alleged injustice which Mr Housego identifies, if injustice it be, would arise in any event if the contract in terms provided for retirement on the occurrence of a particular event. So here, if the contract had in terms specified that the retirement was to take effect on the redevelopment that would plainly be a case where the contractual retirement age was not ascertainable and the default age of 65 would have to apply. So there would potentially be a claim for a redundancy payment.[39]However, whilst we have reservations about the Tribunal's reasoning on this point, we consider that it reached the correct conclusion. As we have noted, in the Wall case the majority in the Court of Appeal considered that where one is dealing with a unique employee, the contractual age is the normal retirement age.[40]It is true that the Court of Appeal was not there faced with an argument that there may be an expectation of continuing employment beyond the contractual retirement age. However, in our view the potential divorce between the contractual retirement age and the normal retirement age - the age at which someone may reasonably expect to be retired - only arises in circumstances where there is a group of employees in the same position and the practice has emerged of retiring them at some point other than the contractual retirement age.[41]That is the situation envisaged by Lord Fraser in the Waite case, as the extract from the judgment reproduced above demonstrates. It is the unfairness of treating the particular employee differently from his peers which rebuts the usual inference that the contractual retiring age in the normal retirement age.[42]Furthermore, in the case of a unique employee; it seems to us that the reasonable expectation is that the contract will be respected. Any indication that there may be more favourable treatment does not give rise to a legitimate expectation as such.[43]Of course, the contract can be varied by agreement in which case the expectation will thereafter change. But it has always been accepted here that the contractual retiring age was 60 (assuming that the amendment to 65 was void). It was not ever suggested that the indication or expectation, whatever it was, had resulted in a variation in the contract so that the contract itself specified that retirement would take effect on redevelopment.[44]In the absence of such variation, we do not think it was open to the Tribunal to conclude that there is any difference between the contractual retirement age and the date when the employee might legitimately expect to be retired. We would add that if we had concluded that there was scope for a legitimate expectation, inconsistent with the terms of the contract, having the effect of changing the normal retirement age, we would have remitted the case to the Employment Tribunal for it to reach clearer findings as to the precise nature of the alleged expectation and the circumstances in which it was said to have arisen. In view of our conclusions, however, this is not necessary and this ground of appeal fails. The lawful contractual variation argument.[45]We turn to the second argument. The appellant contended that after the transfer he had agreed to a new contractual retirement age of sixty-five. Accordingly, in line with the Wall case, that fixes the normal retirement age at sixty-five.[46]The respondent submitted that this was not so because although there had been a contractual agreement to that effect, it was void as a consequence of Regulation 12 of the 1981 Regulations. The variation was by reason of the transfer and therefore void. The appellant contended before the Employment Tribunal that the relevant case law, to which we have made reference, merely rendered void any variation which was to the detriment of the employee but did not prevent him from taking advantage of variations which were for his benefit.[47]The Tribunal rejected this analysis in the following way:
"In these circumstances what has happened is that under the contract entered into by the Claimant with the Respondent the right of the employer to require the employee to retire at a specified age has been reduced from the age of 65 to the age of 60. Regulation 12 provides that any provision of any agreement shall be void insofar as it purports to exclude or limit the operation of regulation 5. Regulation 12 does not limit itself to outlawing any variations which are to the disadvantage of the employee: it is neutral as between the employer and the employee. The conclusion, therefore, to which we have come is that the purported variation of the contractual retirement age from 65 to 60 is void because it was entered into in connection with a relevant transfer and is void by virtue of Regulation 12."
[48]Once the contractual retirement age of sixty-five was rendered void then of course the age of sixty was the contractual age and that fixed the normal retirement age at sixty. Hence the reason why the Tribunal concluded that the appellant could not pursue his claim.[49]Mr Kohanzad essentially repeated before us the arguments that he had advanced below. He submitted that there is no reason to limit the claim of the employee in this way. Daddy's Dance Hall and Credit Suisse were both cases where the employee was seeking to avoid a particular variation which resulted in a detriment, albeit that objectively viewed the package of terms and conditions was either as favourable or more favourable than those he had enjoyed with the transferor. Here there was no reason why the employer should be allowed to resile from the agreement which he had made. Nothing in the Directive was directed at protecting the interests of the employer. Moreover, there was no balancing exercise required in this case such as had occurred in both those cases. There was only the change in the contractual retirement age which the employee considered was for his benefit.[50]Mr Housego accepted that the policy considerations which have weighed with the European Court in Daddy's Dance Hall and similar cases were not applicable here. But he submitted that the ECJ had also emphasised that outside the area where these considerations of public policy operate, it was for the national systems of law to determine whether any variation was legitimate or not. He contended that this is what regulation 12 does. The provision is clear and unambiguous: in terms it treats as void any agreement which restricts or limits, inter alia, the transfer of all rights and liabilities under the employment contract. The regulation is not just directed so as to render void such amendments which are detrimental to the employee. All amendments are treated the same way. Had regulation 12 been intended to have the more limited effect now relied upon, then different language would have been used to reflect that fact. The essence of a void agreement is that neither party can enforce rights under it. Moreover, it would be unjust if the employee could pick and choose whether or not to enforce the later agreement but the transferee employer could not.[51]We recognise that there is force in Mr Housego's submission, but we reject it and hold that the appellant's argument on this point is correct. In our judgment there is no reason of public policy, as reflected in the Directive, why the appellant should be barred from relying upon this contractual amendment. On the contrary, it seems to us that it would be inconsistent with the aim of protecting the workforce to refuse them benefits contractually conferred by the transferee.[52]The principle is that they should not be prejudiced as a result of the transfer, and yet if they were barred from enforcing more favourable terms, that would be the effect. Terms upon which they could have relied had they been agreed with the transferor prior to the transfer they will not now be able to rely upon because they have been made by agreement with the transferee after and by reason of the transfer. Nor is it an infringement of the principle that their rights should be safeguarded on transfer to allow them to enforce more favourable rights conferred after or at the time of the transfer.[53]In our view Daddy's Dance Hall and Credit Suisse merely establish that if the employee wishes to rely upon a term originally found in the agreement with the transferor (but which will have transferred to the transferee) rather than relying upon a term in the varied or new agreement with the transferee, he will be entitled to do so. It is not a question whether objectively viewed the original term is more beneficial or not. It is simply a question whether the employee wishes to rely upon it, although no doubt he will only do so where he thinks that it is beneficial. He must be the best judge of his own interests. If he perceives it to be beneficial to seek to rely on the original term, he can seek to do so in preference to the inconsistent later term. (There is a powerful argument why it should sometimes be a condition of so doing that he gives credit for benefits derived under the new contract, but that is not an issue that arises here.)[54]However, in our judgment there is no reason why he should not be permitted to hold the employer to the new term if he considers it to be more favourable. Again, it is immaterial whether, objectively viewed, it is more favourable. So in this case, as the Employment Tribunal pointed out, it is by no means clear whether all employees would perceive a change in the contractual retirement age from 60 to 65 as beneficial. That does not matter; it is enough that this particular employee considered that it was.[55]Nor, in our view, does regulation 12 compel the conclusion that such variations be treated as void. In our judgment that regulation, naturally construed, simply covers the situation where an attempt is made by agreement- and it will usually but not inevitably be between transferor and transferee – to prevent the transferee from refusing to employ the relevant employees or from refusing to pick up the liabilities towards them which formerly rested with the transferor.[56]What Regulation 12 does not directly deal with, and indeed what remained unclear and controversial until the decision in Daddy's Dance Hall, was whether, following the transfer, the employees could agree by contract to a variation of the employment contract with the transferee. There were powerful arguments for supposing that they could and that the purpose of the Regulations was merely to ensure that the transferee after the transfer stood in the shoes of the transferor. This would have enabled the transferee to vary the contract by agreement with the employee after the transfer in precisely the same way as the transferor could have done before the transfer.[57]Indeed, in Daddy's Dance Hall itself that was the argument advanced on behalf of the UK Government. Daddy's Dance Hall established that no such variation could be legally binding on the employee where the reason for the change was the transfer itself, and so regulation 12 thereafter had to be construed to give effect to that principle. But the regulation does not have to be construed so as to have any greater effect.[58]In any event, Mr Housego's argument is that regulation 12 imposes a restriction which is more severe than that which the European case law requires. In our view it cannot lawfully have that effect. As we have said, it was passed under s.2(2) of the European Communities Act and that does not permit the regulations so drafted to go beyond the purpose of giving effect to European law. To the extent that they do, it seems to us that they must be invalid. On the assumption that they were intended to be valid, they should if possible be given an interpretation so as to do no more than implement the principles of European law.[59]If we are right as to the scope of the Daddy's Dance Hall principle, this is another reason why Mr Housego's argument cannot succeed. (This argument was not raised by or with the parties; had it been central to our decision we would have given them an opportunity to make submissions on it.)[60]In our judgment, therefore, it is not necessary to construe regulation 12 so as to prevent an employee from seeking to take the benefits of a contract varied with the transferee or, to put the point the other way, it is not necessary to allow an employer to raise a defence that the term on which the employee seeks to rely is void because made by reason of the transfer. The employee can object to any change which he considers to be to his detriment, and the existence of compensating advantages will not deprive him of that right (although he may well have to give up any benefits obtained under the varied contract as a condition of so doing).[61]In our judgment no similar right is conferred on the transferee employer. There is nothing in the case law of the ECJ, nor in the Regulations, nor in the public policy which they are designed to enshrine, which would require that the transferee employer be allowed to resile from a voluntarily agreed variation to the contract, even where the transfer is the reason for the variation, as it admittedly was in this case. Disposal[62]It follows that the employer is not entitled to refuse to give effect to the contractually agreed retiring age of 65, the normal retiring age is therefore 65, and the employee is eligible to pursue his claim for unfair dismissal. The finding of the Employment Tribunal was that the dismissal was by reason of redundancy but was automatically unfair. That has not been challenged in this appeal. Accordingly we remit the matter to the same Tribunal to consider the question of remedy.