Transfers of undertakings overseas

19 October 2017

The Transfer of Undertakings (Protection of Employment) Regulations, known as TUPE, maintain an employee’s right to the same terms and conditions of employment when some part or all of the business they work for is transferred to a new owner. There are complexities that apply, but that is the basic premise.

Mr Zeb was based in the Finance Accounting Team at Xerox UK’s site in Wakefield. The company decided that his team’s function would be transferred to a Xerox business based in Manila in the Philippines. It was accepted that that would be a transfer of an undertaking within the meaning of TUPE. Mr Zeb said that he was entitled to relocate to Manila with his existing terms and conditions intact (his salary was significantly more than that which would be paid to locally-recruited staff in the Philippines) but the company refused; the point of the transfer was to save money. While he could relocate, he could not do so on his existing terms. Mr Zeb was dismissed and received statutory redundancy pay.

The tribunal upheld his unfair dismissal claim. It hadn’t been shown that redundancy was the potentially fair reason for dismissal. He was not redundant. There was a job for Mr Zeb in Manila and he had transferred to the new employer knowing that relocation was the only way of continuing his employment. His contract had been varied (change of workplace), entitling him to work in the Philippines under TUPE and on his UK terms.

That unfair dismissal decision was overturned on appeal. The Employment Appeal Tribunal (EAT) held that Mr Zeb couldn’t, by himself, change the location term in his contract from Wakefield to Manila. The employer’s position had always been that if individuals were interested in relocating to the Philippines, employment would be offered on the local terms and conditions. That was not an agreement to Mr Zeb relocating on his UK terms, so there had been no valid variation of the contract.

After the transfer, the new employer ought to have employed Mr Zeb in Wakefield, on his usual terms. But, as the requirement for people to work in finance accounting in Wakefield had come to an end, there was doubt over the tribunal’s original conclusion that Mr Zeb was not redundant. A fresh tribunal will now consider that point, as well as the fairness or otherwise of the dismissal.

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