TUPE transfers - timing and geographical considerations
A recent case offers useful guidance to employers in respect of the timing of TUPE transfers in the context of a series of transactions, as well as in respect of geographical considerations where a business operates internationally.
In the case of Rajput v Commerzbank AG and anor, Commerzbank AG (CAG) decided to transfer its Equity Markets and Commodities (EMC) division to Société Générale (SG). As the EMC division was split across multiple components and operated internationally, the transfer was effected in 'batches'.
Separately to the series of TUPE transfers, a dispute arose between the claimant (R) and CAG, in respect of R's employment. R was dismissed in March 2020 and brought Employment Tribunal claims against CAG and SG. Prior to her dismissal, R had been assigned to the EMC division and was therefore a transferring employee.
A question arose as to the date of the transfer of R's employment from CAG to SG. R argued that the transfer date was 10 May 2020 as this was the date that the transfer of her part of the EMC division was complete. CAG argued that R had transferred to SG previously, on 1 October 2019, and that with hindsight her dismissal might be considered a nullity as CAG did not employ R at the time. The Employment Tribunal agreed with CAG, and R appealed to the Employment Appeal Tribunal (EAT), arguing that the transfer is not effective until the last transaction in a series takes place.
EAT decision
The EAT found that there is no presumption or rule that a transfer effected by a series of transfers is only effective from the date of the last transfer in the series. The Tribunal had therefore correctly found that the date of transfer of R's employment was not necessarily the date of the last transfer in the series. However, the Tribunal had made an error in that it had discounted the international element of the EMC division from its considerations. A business or part of a business can be situated in the UK without its entire operation being located in the UK. The Tribunal is not required to consider only the part of the organised grouping of employees based in this country when making findings in respect of TUPE transfers. The EAT allowed R's appeal on this point and remitted the case to the Tribunal for reconsideration.
Best practice
This is a fact-specific decision, but nevertheless is a source of useful guidance for employers. The decision confirms that a TUPE transfer will not necessarily take effect on the date of the last in a series of transfers. Where TUPE applies, the date of the transfer is the date on which responsibility (as employer) passes from transferor to transferee. When determining the point in time where this responsibility passes, any parts of the business located outside the UK may also need to be taken into consideration.