The service provision change regulations

The regulations governing service provision change were introduced into TUPE in 2006. These changes were made because of evidence that some transfers, especially in service-intensive industries, were falling outside the regulations, leaving employees unprotected. There was also considerable confusion and uncertainty on all sides, with employers unsure whether or not TUPE was triggered. Also, some transferees tried to avoid TUPE altogether by taking over the contract to provide a service, but refusing to take on any of the employees — claiming that because of this, TUPE did not apply (Atos Origin UK Limited v Amicus and others ([2004] EAT/0566/03). This generated a huge amount of litigation between transferors and transferees, arguing between themselves as to whether employees’ contracts had been transferred to the new business and who was responsible for them.

These factors resulted in the service provision change regulations (regulations 3(1)(b) and 3(3)(a) of TUPE). Although these regulations are not perfect, they have largely eliminated the uncertainty as to whether TUPE applies, and this is evidenced by a steep decline in the volume of litigation contesting this issue.