UK: HMRC update on national minimum wage liabilities following a TUPE transfer

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.

France: Important new decision in relation to the automatic transfer of employees

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.

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Updated HSF multi-jurisdictional guide to employee issues in business transfers

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.

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UK: Employees on long-term sick leave are not ‘assigned’ for TUPE transfer if absence is permanent

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

UK: TUPE: employee suspended by contractor following client request for removal may still be assigned to contract

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.