Outside the transfer window: TUPE and share sales

When does TUPE (the Transfer of Undertakings (Protection of Employment) apply to a share sale? The answer to that question is highly relevant for both employment litigators and those involved in M&A transactions.

The recent decision of Garnham J in IMSL v Berry [2017] EWHC 1321 (QB) addresses that question in the context of an application for a garden leave injunction. The Court rejected the Defendants’ attempts to extend the proper scope of TUPE’s application, but provided helpful new guidance on the relevance of TUPE to share sales. It also clarified the circumstances in which:

(i) the Court will recognise a non-contractual employer; and

(ii) a new parent can be said to have taken control of a subsidiary to such an extent that it takes over the subsidiary’s role as employer.

Macfarlanes acted for ICAP Management Services Limited in its claim against Mr Berry and BGC. The Macfarlanes team comprised Jonathan Arr (partner), Joanna Constantis (senior counsel) and Christopher Charlton (senior solicitor). Macfarlanes instructed counsel Daniel Oudkerk QC, Jane McCafferty and Edward Brown.