January 29, 2008

TUPE Can Apply to Transfers Outside the United Kingdom

The Employment Appeals Tribunal (EAT) has held in the case of Holis Metal Industries v GMB that it is possible for TUPE 2006 to apply to transfers of businesses outside the United Kingdom. This issue had previously been the subject of legal debate.

The entity concerned was part of a track, pole and blind manufacturing business which was based in the United Kingdom and which was being transferred to a new undertaking based in Israel. None of the employees based in the United Kingdom were taken on by the new undertaking.

Without a closer examination of the facts, the EAT said that it was not able to decide whether TUPE 2006 applied in this particular case. However, Ansell J did hold that as a matter of principle TUPE 2006 can apply to transfers of businesses outside the United Kingdom, including transfers outside the European Union. While he acknowledged that enforcement of any tribunal awards might prove difficult in these circumstances, he also stated that enforcement may be less difficult in "these days of multi-national corporations and economic inter-dependency."

This decision did not contravene the principle that legislation should not normally be regarded as having extra-territorial jurisdiction, as the requirement in TUPE 2006 that the transferring business should originally be situated in the United Kingdom provided a sufficient connection with the United Kingdom to give jurisdiction to the UK courts.

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