The Employment Appeal Tribunal has decided that TUPE is capable of applying where an undertaking in the UK is sold to a foreign buyer and immediately shifted to a new location abroad. However it is important to note that it did not decide that TUPE will necessarily apply to these sort of cases and the judge said that each case must be decided on its own facts, in the usual way. He cautioned that, in off-shoring cases, there must be a serious issue around whether the undertaking can retain its identity, without which employees could not assert their rights.
The facts in the case, Holis Metal Industries Ltd v GMB decided on 12 December 2007 were simple. The 'Swish' blind-making business had a factory in Tamworth, making tracks, poles and blinds. The owners, Newell, sold the tracks and poles manufacturing business to Holis of Israel. Holis shifted manufacturing immediately to Israel. The 107 relevant employees were told they would be made redundant unless they agreed to move to Israel. None of them did, so all were made redundant by Holis, though for administrative convenience, Newell paid the redundancy money. The GMB union then brought a case claiming there was a breach of the duty to inform and consult.
The appeal tribunal was asked to decide as a preliminary issue whether the TUPE Regulations 2006 were capable of applying to an "off-shoring". As a matter of principle, they decided it was capable of applying because there was at least a part of an undertaking situated in the UK, so fulfilling the first part of the test in Regulation 3(1), but did not decide whether it actually applied. It was sent back to the Employment Tribunal to reach a decision whether in fact there was a transfer of that economic entity which retained its identity, as required by the second part of the test in Regulation 3(1).
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 10/01/2008.
