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Activities consisting of the supply of goods
[ch 12: page 456]There will be no service provision change if the contract is wholly or mainly for the supply of goods for the client’s use (as opposed to services). For example, TUPE will not apply to a change of contract to supply food to a company, because it is a contract for the supply of goods, whereas TUPE is likely to apply if the contractor is responsible for running the company’s canteen, since this would be a contract for the supply of services. These limits were tested in the next case:
Assembly line workers supplying components to a vehicle manufacturer argued that their employment transferred when that manufacturer changed supplier, on the basis that they were supplying not goods but services. They argued that “services” included, for example, checking that the goods were safe to use and sourcing parts. The EAT disagreed, ruling that these services were only part of the employees’ overall responsibility which was for the supply of goods. As a result, their employment did not transfer.
Pannu v Geo W King Limited (in liquidation) [2011] UKEAT/0021/11/2112
https://www.bailii.org/uk/cases/UKEAT/2011/0021_11_2112.html