From Acquired Rights to Reverse TUPE: Employment Law Issues in Global Outsourcing Transactions

Ute Krudewagen, Baker & McKenzie
Carole Spink, Baker & McKenzie

Abstract

The article analyzes the numerous employment law issues that arise in global outsourcing transactions. For many of these issues, there are no clear-cut answers on how a company (or the potential service provider) should proceed. For example, in some countries, relevant employees transfer by operation of law to the service provider, even if the parties do not with this to occur. In these circumstances, the parties will need to make important decisions on what to do with any “unwanted” employees who transfer automatically in spite of the parties’ intent. Similarly, the termination of “unwanted” employees can also pose its own difficulties, particularly in jurisdictions where the termination of an employee solely due to an employment transfer is per se invalid. the article provides guidance and examples of how some companies have addressed these grey areas.

Second, the article attempts to set forth various implementation steps that a company considering a global outsourcing transaction should take. Although each outsourcing transaction is different, there are common issues that a company should consider from the preliminary stages (such as, for example, whether to outsource at all), the negotiation and transfer process, to the end of the long-term contract.