TUPE: Key Differences between NI & ROI Cross Border Transfers

In the latest series of 'Back to Basics' Laura Feely, Associate with A&L Goodbody's Employment Law Group details the complex differences between Northern Ireland and Republic of Ireland cross border transfers and the implications for businesses each side of the border.

Transcript

So, the transfer of undertakings, commonly referred to as TUPE, is a very complex area of law. And for businesses that are operating on both sides of the border, and particularly where there is a cross-border transfer situation, it becomes an even more challenging area of law. And this is because there are two different legislative regimes between the North and the South.

Background to the Legislation

So, both jurisdictions have implemented the EU Acquired Rights Directive, and this was designed to protect employees in a situation where there is a transfer of a business or part of a business from one owner to another.

So, helpfully, the legal position in both jurisdictions is very similar. This means that a transfer will happen where there is a stable economic entity being transferred from one employer to another, and all the employees that will attach to the business have the right to transfer over on their existing terms and conditions of employment and also with their length of service intact.

Differences between North and South

However, there are some differences between TUPE legislation in NI and ROI that employers, when they're facing a potential cross-border transfer situation, would need to be mindful of.

One of the most noticeable differences is where there is a change in a service provider. In NI, they have legislation which provides that there is an automatic transfer where there is a change in a service provider. And this would be, for example, where a business outsources an activity such as catering or cleaning, and where they might change the contractor.

In ROI, however, there is no express service change provision, and therefore, the application of TUPE is less certain.

So, in ROI, Irish employers will have to follow the principles that are set out in European case law. And this means that you'd have to look at all the circumstances of that particular situation to see whether or not TUPE will be triggered. And this is very fact specific.

Duty to Inform and Consult

In both jurisdictions, there is a duty to inform and consult with the affected employees. And in both jurisdictions, you'd have to give information, such as the reasons for the transfer, the date of the proposed transfer, and any legal, economic or social implications.

In ROI, this process must take place at least 30 days before the transfer happens. However, in NI legislation, there is no prescribed period, but there must be meaningful consultations taking place with the affected employees.

So, in both jurisdictions, there is a duty to inform and consult with the affected employees. Affected employees would be entitled to have certain information, such as the proposed date of the transfer, the reasons for the transfer, and any legal, economic, or social implications.

In ROI, this must take place at least 30 days before the transfer happens. However, there's no prescribed period under NI legislation, but there must be sufficient time before the transfer that this information and consultation takes place to allow for a meaningful consultation.

Provision of Employee Information

Under Irish TUPE legislation, the transferor has an obligation to provide the transferee with all the rights and obligations that are arising out of contracts of employment on the date of the transfer.

Under NI legislation, this is more specific, and it provides that the transferor must provide what's known as employee liability information at least 14 days before the transfer takes place. And this could be information such as any disciplinary or grievance procedures that have taken place in the last two years, or also any information in relation to claims or potential claims brought by employees.

However, in both jurisdictions, in practice, it would be standard that this information would be furnished in a legal due diligence process.

Conclusion

So, overall, there are a number of practical issues to consider and pitfalls to avoid when you are deciding whether or not TUPE is going to be triggered. And this will be particularly prevalent where there is a cross-border transfer, as there are a number of differences between the legislation in the North and the South. Therefore, it's imperative that businesses would, when facing such a cross-border transfer, seek legal advice as early as possible in the process.