I have recently made staff redundant from a business analyst firm
in the UK. Their jobs have been taken by an outsourced company
based in Bombay. If the company had been based in the UK, the
change would have come under the Tupe regulations. Do these still
apply if the job has been given to a foreign national working on a
work permit in the UK?
The Transfer of Undertakings (Protection of Employment) Regulations
1981 (Tupe) apply on the transfer of a business or undertaking.
This typically occurs when a business is sold or a function is
outsourced and the entity retains its identity. Employees of the
undertaking transfer to the new organisation on their existing
terms and conditions.
Tupe can apply where the undertaking is situated in the UK
immediately before the transfer, even if it is moved outside the UK
afterwards.
If the job was outsourced to a company based in Bombay the
employment should therefore have transferred to the company. Staff
dismissed for a reason connected with the transfer can
automatically claim unfair dismissal. Liability for this will pass
to the Bombay company.
But if the original employer can establish that there was an
economic, technical or organisational reason for changes in the
workforce, then it has a defence to any claim of unfair dismissal.
It could argue that it needed to relocate some of its functions to
Bombay because labour costs are cheaper there. However, if a job
has been taken by a UK-based worker this defence may not work.
Even if the original employer can establish an economic, technical
or organisational reason, the procedure for carrying out the
dismissal still needs to be fair. If it was not then liability for
the dismissal remains with the former employer.
Staff with one year's continuous service can make an application to
an employment tribunal for unfair dismissal within three months of
employment ending.
Although liability may have passed to the Bombay company, they can
claim against both it and the original employer - the tribunal will
decide which, if either, is liable.
This is a general guide only. Please contact a solicitor for
personal advice
Fiona Muxlow is a solicitor at Taylor Joynson Garrett.