This month in our comparative table here, we consider the legal obligations on employers considering a transfer of business/undertaking, focussing on the position in China, Indonesia and Thailand.
Category: Business sales/transfers
This month in our comparative table here, we consider the legal obligations on employers considering a transfer of business/undertaking, focussing on the position in Singapore, Hong Kong and Japan.
On 21 September 2018, the Minister of Labour announced the National Legislative Assembly’s (“NLA“) in principle approval of the draft amendment (“Draft Amendment“) to the Labour Protection Act B.E. 2541 (1998) (“Act“). Key changes and implications for employers are discussed below. Continue reading
HMRC has issued an update confirming that, with effect from 2 July 2018, where there has been a TUPE transfer of employees, all national minimum wage liabilities, including the full penalty amount, will now be enforced against the transferee employer, including penalties triggered by pre-transfer arrears. This highlights the importance of transferees obtaining an indemnity from the transferor to cover these liabilities where possible.
Following a public consultation on the review of the Singapore Employment Act (the “EA”), the Ministry of Manpower (“MOM”) announced on 5 March 2018 that amendments to the EA will be implemented effective 1 April 2019.
The French Supreme Court has recently issued an important new decision relating to the automatic transfer of employees in the case of asset transfers (the equivalent of the TUPE relations).
In this decision the Supreme Court held that the transfer of all employees of a company without a site works council would be treated as a "partial" transfer of employees where the company in question formed part of what is known as a UES (unique social and economic entity) with other companies.
Employment law issues rarely determine the strategy for a multi-jurisdictional business acquisition, but they can certainly give rise to significant avoidable costs and delay if issues are not spotted in advance. In the Herbert Smith Freehills 2016 global survey, 57% of respondents cited employment regulations as one of the reasons a deal had failed to complete. The temptation may be to assume that employee issues will be broadly similar in each country, but in practice employment law varies significantly from jurisdiction to jurisdiction and it is not even safe to assume that a particular continent will have a broadly similar approach.
The EAT has confirmed that, where a service being provided by a transferor is split along functional lines, with two separate activities carried out by two organised groupings of employees, it is possible for there to be a service provision change of one of those functions to which TUPE will apply.
Case law has established that temporary absence from work, for example on sick leave or family-related leave, does not prevent an individual being 'assigned' to a grouping of employees and therefore transferring with that grouping where there is a service provision change under TUPE. The EAT has now confirmed that the position is different where the absence is permanent, ie there is no expectation of a return to work; in that event an employee will no longer be 'assigned' to the grouping. Continue reading
Businesses that outsource services may wish to retain the right to oblige a service-provider to remove a particular employee from working on that contract. The recent case of Jakowlew v Nestor Primecare illustrates that an employee will remain assigned to the contract until the client’s request to remove her is actually implemented. As the employee had simply been suspended while the contractor disputed the request, she remained assigned and therefore transferred to the new provider when the contract ended. Clients may wish to deal with the associated risks by way of indemnity.