Holis Metal Industries Ltd v GMB: UKEAT/171/07

EAT: Judge Ansell: 12 December 2007

The claimant trade union represented workers employed by the first respondent, which transferred part of its business to the second respondent. After the transfer, the part transferred was relocated in Israel; none of the employees moved to Israel and were dismissed on the ground of redundancy. The union brought a claim against the respondent companies for breach of the duty to consult imposed by regulation 13 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 and by section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 . An application by the second respondent to strike out the claim on the ground that the statutory provisions did not apply to the transfer of a business to a base outside the United Kingdom was dismissed by the employment tribunal, as being inconsistent with, inter alia, article 1(2) of Council Directive 2001/23/EC.

The second respondent transferee appealed.

The Employment Appeal Tribunal held:
Given that the purpose of Directive 2001/23 and the Transfer of Undertakings (Protection of Employment) Regulations 2006 was to safeguard the rights of the workers in the event of a change of employer, and that the wording of article 1(2) of the Directive and regulation 3 of the Regulations restricted those provisions to transfers of undertakings situated immediately before the transfer in the United Kingdom, a purposeful approach required employees to be protected even if the transfer was to be across borders outside the European Union. Accordingly, the Regulations had the potential to apply to a transfer from the United Kingdom to a non-EU entity in the event that on the transfer the undertaking did not remain within the jurisdiction. But, in any event, the employment tribunal had found that both the transfer and the redundancies in question had taken place while the undertaking was still in the United Kingdom and, therefore, even on a most limited view of the extent of their jurisdiction, the Regulations applied to the transfer.

The appeal was dismissed.

Appearances: Adrian Lynch QC (DLA Piper UK LLP, Birmingham)for the second respondent; Nicholas Siddall (EAD Solicitors, Liverpool) for the union; the first respondent was not present or represented