The Transfer of Undertakings (Protection of Employment)
Regulations (TUPE) protect the rights of employees whose companies
are taken over by new owners. In 2006 they were expanded to govern
situations where work is outsourced, brought back in-house or the
service provider is changed. The ruling is the first to look at the
meaning of a service provision change in the law.
The Employment Appeals Tribunal (EAT) has ruled in a case
involving service providers in which it found that the employees
did have TUPE rights when work was transferred from one location to
another and from one service provider to another.
The employees of one provider argued that their employment had
been transferred to the new provider, and the EAT agreed, saying
that it was the first case to be heard at EAT level that involved a
TUPE dispute relating to service providers.
In the ruling, the EAT said that workers were transferred from
one employer to the next if "the activities previously carried out
by client or contractor have ceased to be so carried out and,
instead, are carried out by a contractor or a new contractor or by
the client".
The case centred on accommodation provided for asylum seekers.
The body responsible for providing the accommodation moved it from
its existing supplier in London to a location and new supplier
outside London.
The workers in London claimed that their employment had been
transferred, and the EAT agreed. It said that the important thing
for employers to consider when trying to understand if TUPE rights
existed was whether the service provided after the change was
essentially the same as before it. If it was, the employees had the
right to transfer to the new provider, it said.
Ben Doherty, an employment law
specialist at Pinsent Masons, the law firm behind OUT-LAW.COM, said
that the ruling extends to 'type B' TUPE claims relating to
outsourced work the approach tribunals have taken to in-house work
in 'type A' claims.
"This is helpful guidance from the EAT in deciding whether a
service provision change exists. The drafting in the Regulations is
fairly detailed and the EAT reminds us not to take too legalistic
an approach," he said.
It had been argued that the services carried out by the new
provider were not exactly the same as those provided by the old
one, but the EAT said that claims can be made when services
provided are not identical.
"It cannot, in my judgment, have been the intention of the
introduction of the new concept of service provision change that
that concept should not apply because of some minor difference or
differences between the nature of the tasks carried on after what
is said to have been a service provision change as compared with
before it," said the ruling. "A commonsense and pragmatic approach
is required to enable a case in which problems of this nature arise
to be appropriately decided."
"The Tribunal needs to ask itself whether the activities carried
on by the alleged transferee are fundamentally or essentially the
same as those carried out by the alleged transferor. The answer to
that question will be one of fact and degree, to be assessed by the
Tribunal on the evidence in the individual case before it," it
said.
It said that the Employment Tribunal hearing the original case
noted the differences between the services provided by the old and
new companies but was right to conclude that the services provided
were basically the same.
"This ruling shows that tribunals will take a broad, pragmatic
approach that is not concerned with getting overly legalistic,"
said Doherty.
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