The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) apply to a transfer of a business when the business is situated immediately before the transfer in the United Kingdom, and to a service provision change, when there is an organised grouping of employees situated in the UK immediately before the service provision change. TUPE is drafted in such a way as to suggest it applies to international transfers, although neither TUPE nor the European Acquired Rights Directive, under which TUPE is made, expressly address the point. Holis Metal Industries Ltd v GMB & Newell Ltd is therefore of interest, as it is the first case to consider whether TUPE applies to an international transfer of a business. The case concerned the transfer of part of a curtain-making business from a factory in England employing 180 employees to a company based in Israel. None of the employees were taken on. The trade union representing the employees and the factory brought claims against the Israel-based company for failure to consult under TUPE and in relation to collective redundancies. The EAT held that TUPE did potentially apply to the transfer. It determined that such a decision did not offend the principle that legislation should not normally be regarded as having extra-territorial jurisdiction, because the requirement that the business originally be based within the UK provided sufficient connection with the UK to give jurisdiction to UK courts. Parties to future international transfers therefore risk exposure to TUPE claims (and in particular protective award claims of up to 13 weeks’ pay per affected employee for failure to consult) if TUPE is ignored.
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TUPE can apply to transfers out of the UK
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