Jagruti Rajput v Commerzbank AG & Anor

Where a transfer is effected through a series of transactions, the transfer date is the single factual point at which responsibility for carrying on the transferred business moves from transferor to transferee. It is not presumed to be the date of the final transaction. Nor is there a requirement that responsibility be “full and final”.

In a standard transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006, the enquiry concerns the economic entity that was transferred. Once that entity is accepted as situated in the United Kingdom, a tribunal must consider the entity as a whole. It must not exclude a substantial overseas component merely because that component is geographically located outside the United Kingdom.

The claimant, a compliance officer assigned to Commerzbank’s Equity Markets and Commodities business, brought employment claims against Commerzbank and Société Générale. The business was sold to Société Générale through batches and sub-batches between 2019 and 2020.

An Employment Judge determined, as a preliminary issue, that the relevant transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 occurred on 1 October 2019. The judge focused on the London-based Asset Management and EVF operations, treating the predominantly German Flow operation as outside the relevant enquiry.

The claimant appealed, contending that the transfer could occur only at the end of the series of transactions, that the judge applied the wrong test, and that he wrongly excluded the non-UK component of the transferred economic entity.

1. Appeal allowed in part. The appeal failed on the contention that a transfer effected through a series of transactions must occur on the date of the final transaction. Under Transfer of Undertakings (Protection of Employment) Regulations 2006 regulation 3(6)(a), a series is permissible, but the transfer date remains the particular factual point at which responsibility for carrying on the transferred business moves to the transferee. Completion may be artificially delayed and the final transaction may concern only a minor residual matter.

2. The court rejected a gloss requiring “full and final” responsibility. A transferor may retain minor mopping-up functions after responsibility for the business has substantively passed. The applicable formulation was that in Celtec Ltd v Astley, [2005] ICR 1409.

3. The Employment Judge’s reference to the “essential nature” of the activity did not itself invalidate the decision. That phrase was tautological and added no separate legal test. In a standard transfer case, the Celtec test should be applied without such glosses.

4. However, the judge materially erred by confining the enquiry to the London operation. It was common ground that the transferred economic entity was the multinational EMC business and that it was situated in the United Kingdom for regulation 3(1)(a). The Flow business, mainly based in Germany and accounting for about two fifths of the purchase price, remained part of that entity. Regulations 3(4)(b) and (c) confirm that foreign law and employees working outside the United Kingdom do not prevent the Regulations applying.

5. The erroneous exclusion of Flow could have affected the date found. The issue of the transfer date was remitted to a different Employment Judge for determination on the existing evidence, taking account of the whole EMC business.

• Employment Appeal Tribunal: Allowed the appeal on the geographic-scope issue and remitted the transfer-date question to a different Employment Judge: [2023] EAT 116.
• Employment Tribunal: Employment Judge Graeme Hodgson determined as a preliminary issue that the TUPE transfer date was 1 October 2019, in a decision sent to the parties on 22 October 2021.