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Right to participate in share incentive plan transferred under TUPE
In the case of Ponticelli UK Ltd v Gallagher [2023] CSIH 32 (15 August 2023) the Inner House of the Court of Session has upheld the Employment Appeal Tribunal’s decision that an employee’s right to participate in a share incentive plan arose “in connection with” their contract of employment for the purposes of the TUPE Regulations and that the employee was entitled to participate in a plan of “substantial equivalence” following their TUPE transfer to a new employer.
As well as presenting a significant cost burden, the obligation to provide a share scheme of substantial equivalence may cause considerable practical difficulties for a transferee employer, particularly if it does not operate similar share schemes for its existing employees. It is not known whether Ponticelli intends to appeal further.