In Seawell Ltd v Ceva Freight (UK) Ltd and another UKEATS/0034/11, the Employment Appeal Tribunal (“EAT”) held that an employee who spent 100% of his time working for a single client was not an “organised grouping of employees” for the purposes of regulation 3(3)(a)(i) of the Transfer of Undertakings (Protection of Employees) Regulations 2006 (“TUPE”). Therefore when the client brought in-house work previously carried out by the Claimant’s employer, there was no service provision change.
Continue Reading Service provision changes: Is an employee who works only for one client an “organised grouping of employees”?

The Employment Appeal Tribunal (EAT) has held in Johnson Controls v Campbell and Anor that there was no service provision change under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) where a centralised taxi booking service was brought back in-house by the client. Although the client was still undertaking the activity of booking taxis, there was no “centralised service” in place following the transfer. As a result, there was held to be an essentially different activity in place and TUPE did not apply. 

This case follows another recent decision in Nottinghamshire Healthcare NHS Trust v Hamshaw and others which held that where care services transferred from the Trust to new providers there was not a service provision change because the services were not fundamentally or essentially the same, owing to the methods used to provide them.Continue Reading TUPE: Service Provision Changes and what activities transfer

In Abellio London Ltd (Formerly Travel London Ltd) v Musse and others UKEAT 0283/11 and 0631/11, the Employment Appeal Tribunal (“EAT”) ruled that a relocation of six miles within central London which resulted in the employees having to travel an extra one to two hours to work following a service provision change amounted to a substantial change to employees’ working conditions to their material detriment entitling them to resign under regulation 4(9) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”). As regulation 4(9) of TUPE deems an employee’s resignation to be a “dismissal” where it is in response to such a change, the employees concerned were entitled to claim automatic unfair dismissal and liability for their dismissals passed to the transferee. Since it would not have mattered had the contracts of employment contained valid mobility clauses, the decision is not good news for transferees in TUPE transfer situations. The decision sets a very low hurdle for employees to overcome in order to be able to resign in reliance on regulation 4(9) of TUPE. Transferees will need to consider the extent of this risk when negotiating transfer provisions with the transferor, and, if necessary, seek indemnity protection.
Continue Reading Service provision changes: Relocation because of TUPE transfer was a substantial change to employees’ material detriment

In the case of Eddie Stobart v Moreman & Others the Employment Appeal Tribunal (EAT) has provided welcome guidance on the meaning of “organised grouping of employees” for the purposes of a “service provision change” under regulation 3(3)(a)(i) of the Transfer of Undertakings (Protection of Employees) Regulations 2006 (“TUPE”). A group of employees who happened to work mainly for a particular client because they worked the day shift were found not to comprise an “organised grouping of employees” for “service provision change” purposes under TUPE. The EAT held that, when assessing whether employees will transfer to a new contractor following a service provision change, it is necessary to identify the existence of an “organised grouping of employees” the principal purpose of which is to carry out the relevant activities on behalf of the client, before analysing whether employees are assigned to that group. There will only be an “organised grouping” where the employees in question are “organised” for the purposes of the provision of services to the relevant client.
Continue Reading Service provision changes: UK EAT gives guidance on the meaning of an “organised grouping of employees”

A service provision change does not occur under TUPE where there is a change in the client on whose behalf the services are being carried out. This is the conclusion of the Employment Appeal Tribunal (EAT) in the case of Hunter v McCarrick, the first EAT decision to rule on this issue. The decision does not come as a great surprise but it provides welcome clarification on a point which occasionally arises in outsourcing situations.

What happened in this case

The Claimant (Mr McCarrick) brought an unfair dismissal claim against the Respondent (Mr Hunter) when he was dismissed on 8 March 2010 after having allegedly been employed by Mr Hunter for 7 months since August 2009. Since 2005, Mr McCarrick’s job was to manage a property portfolio owned by Waterbridge Group (WG)(of which Mr Hunter was Managing Director). In order to succeed in his claim against Mr Hunter, Mr McCarrick needed to show that he had at least one year’s continuous employment and that his employment had transferred to Mr Hunter under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) from his previous employers.Continue Reading UK TUPE: No service provision change where client changes identity

This post was also written by Danny Bloom. 

In Enterprise Managed Services Ltd v Dance and Others, a case concerning a TUPE transfer, the Employment Appeal Tribunal (EAT) held that a decision to ‘harmonise’ the incoming employees’ terms with existing employees could have been legitimately made to improve productivity, so that subsequent dismissals based upon the ‘harmonised’ terms may not have been for a reason connected with a transfer, and would therefore not be automatically unfair under TUPE. Although this case should be viewed with caution, it gives transferees some hope that where the reason for post-transfer harmonisation of terms and conditions takes place for a business decision such as to improve productivity, rather than for administrative tidiness, such changes may be lawful.

Regulation 7(1) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) provides that any dismissal of an employee either before or after a relevant transfer will be automatically unfair where the sole or principal reason for the dismissal is either; (i) the transfer itself; or (ii) a reason connected with the transfer, that is not an economic, technical or organisational (‘ETO’) reason. Whether a dismissal is connected with the transfer is a question of fact and will be for the employer to prove that there is no causal link between the two events.Continue Reading UK: TUPE and post-transfer harmonisation of terms to improve productivity not connected to transfer

Employers could face significant unanticipated penalties under TUPE and collective redundancy legislation as a result of the Agency Workers Regulations 2010 (AWR) which came into force on 1 October 2011.

The AWR adds to the list of mandatory information to be provided to employee representatives under TUPE (the Transfer of Undertakings (Protection of Employment) Regulations

The past 18 months has seen a significant number of TUPE related cases. The following is a summary of some of the key decisions.

The meaning of the term `activities’ (Service Provision Change)

A TUPE transfer will occur when there is a ‘service provision change’. In a first-generation outsourcing, where a client outsources an activity to a contractor for the first time, the conditions to be met in order for there to be a service provision change include a requirement that ‘activities’ cease to be carried on by the client for itself and are instead carried on by the contractor on the client’s behalf. As TUPE does not include a definition of ‘activities’, it has been for the Courts and Tribunals to consider how this issue should be approached.

In Metropolitan Resources Ltd v Churchill Dulwich Ltd, the Employment Appeal Tribunal (EAT) decided the activities carried out by the transferee must be ‘fundamentally or essentially the same’ as those that were carried out by the transferor in order for a TUPE transfer to occur. The EAT also indicated in its decision that in assessing whether the activities are similar, a more detailed rather than an ‘overview’ approach should be adopted (i.e. consideration should be given to the exact nature of the activities performed by each of the transferee and the transferor and the exact manner in which those activities are performed).

Further support for the adoption of a detailed approach can be found in the EAT’s decision in OCS Group Ltd v Jones and another. Here, the EAT decided that a contractor which provided catering services to a client by preparing hot and cold meals in on-site kitchens performed activities that were different to those of a contractor which only sold pre-prepared sandwiches and salads. The EAT rejected the ‘overview’ approach argument that the activities carried out by each of the transferee and the transferor in this case should be considered to be the provision of food or catering services and should therefore be considered to be the same.Continue Reading Interpreting TUPE – an update on the latest cases

In the case of Parkwood Leisure Ltd v Alemo-Herron and others, the Court of Appeal has examined the effect of regulations 5 and 6 of Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE 1981) in relation to collective agreements. The Court has held that in circumstances where a contractual right to a pay increase is dependent on collectively agreed terms, the transferee of an undertaking transferred will not be bound by terms collectively agreed by third parties after the transfer. In making this decision, the Court declined to follow established UK case law and preferred instead to follow a 2006 decision of the European Court of Justice (ECJ).

Although the case involved an issue relating to the 1981 Regulations, the law as stated in it will apply to the current Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006).Continue Reading Effect of TUPE on Collective Agreements