Transfers outside the UK

TUPE can apply to transnational transfers within and outside the EU, as long as the business transferred is “situated immediately before the transfer in the UK” (Regulation 3(1) (a), TUPE).

In Hollis Metal Industries Limited v GMB [2007] UKEAT/171/07, the business, a curtain rail manufacturer, was transferred from England to Israel. The EAT confirmed that the Acquired Rights Directive (ARD) covers transfers to countries outside the EU. The ruling is important because it confirms that TUPE information and consultation obligations are triggered when jobs leave the UK (see Chapter 5). An employer that fails to consult before transferring business overseas risks a substantial financial penalty known as a protective award (see Chapter 5). The UK-based employer remains jointly liable for this award even though the jobs have left the UK.

As long as a business is based in the UK, the fact that the workforce spends most of their working week outside the UK will not prevent TUPE applying to a business transfer (see BEIS TUPE guidance, 2014). A slightly different test applies to service provision changes (see page 31). Here, the test is whether there is an “organised grouping of employees” situated in Great Britain immediately before the transfer. This means that if the entire workforce is based outside the UK, TUPE may not apply.