The Employment Appeal Tribunal (EAT) has held in Rajput v Commerzbank AG and anor that there is no rule stipulating that a TUPE transfer brought about by a series of transactions can only happen at the end of that series. It also held that tribunals should not exclude parts of a business from their consideration just because they were located outside the UK.
Basic facts
Ms Rajput was a senior compliance officer in the Equity Markets and Commodities (EMC) division, based in London, for Commerzbank AG (CAG). In September 2017, she brought a discrimination claim against her employer (see ELR 638). At the same time, CAG started negotiations to sell its EMC division to Societe Generale (SG).
As the deal was very complex, the division was sold in a series of “batches” to SG under the framework of The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). While many employees had transferred over to SG by February 2019, a significant proportion transferred in March 2020, with the remainder transferring in May 2020.
Ms Rajput lodged tribunal proceedings claiming that CAG had victimised and discriminated against her in various ways from February 2018 up to the end of March 2020 when she was dismissed by the company. CAG, however, later argued that her employment had transferred over on 1 October 2019, so it was not her employer when she brought her claim against them. For her part, she argued that the transfer had completed on 10 May 2020 when the most valuable part of the business transferred over. This section, however, was based in Germany with only five employees in London.
The key question for the tribunal to decide, therefore, was the date when her transfer to SG took place.
Tribunal decision
Although the deal involved the transfer of the EMC division which was based in a number of different countries, the tribunal judge held that he only had to concern himself with the transfer of those parts of the business situated in the UK. As 95% of the business had transferred to SG on 1 October 2019, he concluded that was when the responsibility for the business passed from Commerzbank to SG.
Ms Rajput appealed to the EAT, arguing among other things, that where there is a series of transactions, the transfer is not affected until the last transaction takes place. More importantly, she argued that the judge was wrong to focus solely on the UK parts of the business and ignore the other parts.
EAT decision
Although the EAT rejected the argument that there was a presumption or rule that a transfer effected by a series of transactions could only happen at the end of the series, it held that the tribunal was wrong to focus solely on the UK parts of the business.
In particular, it referred to regulations 3(4)(b) and (c) which make clear that the involvement of foreign law and legal systems do not prevent TUPE from applying to a transfer, provided it relates to a business (or part of a business) situated in the UK immediately before the transfer. Likewise, it was irrelevant if the transfer was governed by the law of a foreign state; if the employment of people working in the undertaking was governed by the law of a foreign state; and/or if people employed in the undertaking ordinarily worked outside the UK.
The EAT concluded that there was, therefore, no basis for the tribunal judge to exclude a part of the transferred economic entity which was predominantly located outside the UK, while including parts of the business that were predominantly located inside the UK.
It remitted the case to a different employment judge for further consideration.
