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Is there an organised grouping of employees?
There will only be a service provision change under TUPE if, immediately before the change in provider, there was an organised grouping of employees whose principal purpose was to carry out the transferred activities. This is another area where there have been important case law developments.
The “organised grouping” of employees should all share the same employer (Argyll Coastal Services Limited v Stirling [2012] UKEAT/0012/1). To be an “organised grouping” the employees must have been deliberately organised in a team, “by reference to the requirements of the client”. What matters are the client’s requirements for work to be organised in a particular way, rather than the employer’s initiative in organising and scheduling work into teams:
Eddie Stobart ran a warehousing and logistics business distributing meat between suppliers and several British supermarkets. Stobarts lost the contract to work for a particular supplier — Vion. The timing of Vion’s supermarket orders meant that picking and packing on the Vion contract was mainly carried out by the dayshift, whereas the nightshift worked mainly on a different contract. However in practice, warehouse pickers did not know which supplier’s goods they were packing.
The only reason labour was divided in this way was because of the time of day when Vion’s own customers chose to place their orders, combined with shift patterns and working practices at the warehouse. There was no “dedicated Vion team”. This was not enough to create a service provision transfer, which required a group of employees deliberately organised into a team to work for a particular client. Any other result would be unsatisfactory, as employees who were not even aware who they were packing for could find their employment transferred automatically to another employer.
Eddie Stobart Limited v Moreman & Others [2012] UKEAT/0223/11
The “activities” need not have been the only task the organised team carried out before the transfer, but they must have been their main task prior to the transfer. If, before the transfer, employees are contracted to work in a variable pattern across the business, there is much less likelihood of TUPE being triggered.
Where someone belongs to an organised group of employees which supplies services to a variety of different clients, the fact that one member of the group spends 100% of their time servicing just one client does not mean that their employment transfers when that client’s contract moves to a new provider. For example:
CEVA, a freight forwarding and logistics business, employed Mr Moffat as logistics coordinator. The workforce was organised into two groups — the Inbound Group and the Outbound Group. Mr Moffat belonged to the Outbound group and spent 100% of his time on the Seawell contract. Four other members of the group spent between 10% and 30% of their time on the contract. Seawell took their contract back in-house and CEVA insisted that Mr Moffat’s contract had transferred across to Seawell.
The EAT disagreed. There were two deliberately organised groups — the Inbound group and the Outbound group and Mr Moffat belonged to one of them. However, the principal purpose of that group was not looking after Seawell, because it serviced other clients as well.
The fact that one member of an organised grouping spends 100% of his time servicing a client does not make this the principal purpose of the group as a whole.
Seawell Limited v CEVA Freight (UK) Limited [2012] UKEAT/0034/TI
Even if an organisation has only one client, it does not follow that when that client transfers its contract, all the organisation’s employees are part of the organised grouping. They will only be part of the organised grouping if their role involved delivering the contract.
An organised grouping can be made up of just one person (regulation 2(1) of TUPE) (Hunt v Storm Communications Limited (EAT2702546/06)).