EC considers issue of TUPE and cross-border transfers

Rules to protect workers’ employment rights when their company is bought by a foreign business are being reviewed by the European Commission (EC).

John McMullen, head of employment law at legal practice Watson Burton, said although the UK only brought in its new TUPE (Transfer of Undertakings (Protection of Employment) Regulations) in April, the growing number of cross-border deals was causing concern in Brussels.

Speaking at the IRS TUPE and Staff Transfers Update conference in London, McMullen said the commission was now working on rules for what happens when there is a transfer of a business or an outsourcing deal from the UK, either to a country within the European economic area or outside.

McMullen said the EC was conducting a survey with member states on the issue and consulting on whether the Acquired Rights Directive – the overarching EU staff transfer directive – should be amended to apply across borders.

It is expected that a report looking at the way various countries treat staff transfers will be published before the end of this year. The commission will then decide whether to amend or propose a new directive – all of which could take from 18 months to two years.

McMullen said: “Nobody is quite sure what the trans­national effect of TUPE is, so it is up to the EC to make it clearer what happens to employees when there is a cross-border staff transfer.

“This is important as these transfers are becoming increasingly common.

“Any organisation currently involved in having to work out whether TUPE applies to a transnational transfer or a cross-border acquisition will be pleased to receive this clarification.”

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