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Statutory exceptions
There are two specific circumstances in which TUPE will not apply to the transfer of services. These are:
• where the new service provider is only intended to carry out those activities in connection with a single specific event or task of short-term duration; and
• where the activities consist wholly or mainly of the supply of goods.
For example, TUPE will not apply to a contract simply to supply food to a company, but will apply if the contractor is also responsible for running the company’s canteen. These limits were explored in the following case backed by Unite and the GMB:
Assembly line workers worked for their employer, GWK, a business that supplied components to IBC, a vehicle manufacturer. GWK did not just assemble components. It also sourced and acquired them ready for assembly.
GWK became insolvent and IBC found another provider. The assembly line workers argued that they were carrying out services and not supplying goods, so that their employment transferred to the new provider.
The EAT disagreed, finding that the workers were supplying goods. It was correct that the assembly line workers provided a service that involved checking the goods were safe to use and sourcing parts, but that was only part of their overall responsibility which was for the supply of goods.
Pannu v Geo W King Limited (in liquidation) UKEAT/0021/11
New case law has also examined what is meant by the second statutory exception — the rule that the service transfer provisions do not apply to a “single specific event or task of short-term duration”. These cases establish that whether or not a task is of short term duration is basically a question of fact for the tribunal, but what matters is the client’s intention at the start of any assignment, rather than what unfolds in practice (McCarrick v Hunter [2012] EWCA 1399).
Guidance by the Department for Business Innovation and Skills (BIS) gives the example of a security contract for the Olympic Games. It suggests that a contract to give security advice for several years running up to the Games involves a “single specific event” but it is not of “short term duration”, so TUPE will apply. However, if the contractor is hired just to supply security staff during the Games themselves, TUPE will not apply because the contract is only for a short period. However, the EAT has recently cast doubt on this part of the guidance (see Liddell’s Coaches v Cook ([2012] UKEATS/0025/12/BI)).