1. the Acquired Rights Directive 77/187/EEC (and therefore the UK TUPE regulations) apply if there is a transfer of an "economic entity", defined by the ECJ as "an organised grouping of persons and of assets enabling an economic activity which pursues a specific objective to be exercised".

2. the fact that a business brings in-house an activity previously performed for it by outside contractors does not of itself automatically mean that there has been a transfer of an undertaking for the purposes of the Directive (or, presumably, for the purposes of the UK TUPE regulations);

3. there is no rigid set of criteria for determining whether there is an "economic entity" in any particular case. Matters to be considered include its workforce, its management staff, the way in which its work is organised, its operating methods and the operational resources available to it.

4. where an economic entity is able to function without any significant tangible or intangible assets, the maintenance of its identity following a transaction affecting it does not depend on the transfer of such assets.

Similar rulings were given by the ECJ on the same date (10th December 1998) in two other cases in which activities were transferred to new contractors rather than brought in-house (see Sanchez Hidalgo & ors v Asociacion de Servicios Aser & anor 1998 and Ziemann v Firma Ziemann Sichereit GmbH ECJ joined cases C-247/96 and C-173/96, reported at [2002] ICR 73 - also reported at[1999] IRLR 136).

For general notes see Transfer of business or undertaking/what is an ''undertaking''? and Transfer of business or undertaking/what is a ''relevant transfer''? .