When do Tupe rules apply?

I have recently made staff redundant from a business analyst firm in the UK. Their jobs have been taken by an outsourced company...

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.

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