TUPE: Overseas application

Welcome back. It's 2008 and we're kicking off the year with a very important TUPE case.

The EAT has held, in Hollis Metal Industries v GMB, that TUPE 2006 has the potential to apply to transfers of businesses outside the UK (and, indeed, outside the EU). This is the first case to consider this issue.

Part of a curtain-making business was transferred from a factory in England to a new 'employer' in Israel, which is outside the EU. None of the employees were taken on.

The EAT (HHJ Ansell) held that TUPE did potentially apply to transfers outside the UK, notwithstanding that enforcement of any tribunal awards might prove difficult. Such a decision upheld the policy of TUPE and did not offend the principle that legislation should not normally be regarded as having extra-territorial jurisdiction, since the requirement that the business originally be based within the UK provided sufficient connection with the UK to give jurisdiction to UK courts.

The decision queried whether transfers outside the UK could normally be said to retain their identity as a discrete economic undertaking, bubt emphasised this was a question of fact for each case.

[Thanks to Dr John McMullen of Watson Burton LLP, whose book and articles were extensively quoted in the judgment, for telling me about the decision]