The application of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) to the transfer of part of a business from the UK to a non-EU entity has been considered by the EAT for the first time since the Regulations came into force in April 2006 in the case of Holis Metal Industries Ltd v GMB Newell Ltd.

Background
The case involved a transfer of part of the business based in the UK to a business based in Israel.  The EAT took the view that TUPE has the potential to apply to a transfer from the UK to a non-EU entity where the undertaking in question did not remain in the UK after the transfer had taken place.

Impact on Employers

• Employers should be aware that transferring their business or part of their business to an entity outside the EU does not necessarily preclude the application of TUPE.  Provision should be made to limit the liability of the transferring employer by obtaining suitable indemnities from the purchaser and ensuring that it complies with its statutory obligations to inform and (where necessary) consult with representatives of its affected employees.

18 January 2008

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