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Organised grouping of employees
[ch 12: pages 432-433]The next step is to identify the organised grouping of employees whose main task is to perform the activities under the service agreement. Only employees who are engaged in delivering these activities immediately before the transfer date will transfer. Anyone whose main task is to perform ‘organisation-wide’ activities, such as human resources, finance or strategy, is unlikely to transfer, even if delivering the service contract was the organisation’s only activity. Here is a good example:
Edinburgh Council took back in-house its homeless support services that had been contracted out to a voluntary organisation. The employment of everyone engaged in front-line service delivery transferred to the council. But the contracts of the charity’s two directors did not transfer, because they were not engaged in delivering the activities under the service contract. Instead, they worked on wider strategic tasks such as bidding for new work, or managing the charity as a whole. It made no difference that the service contract was the charity’s only business at the time of the transfer.
Edinburgh Home-Link Partnership v City of Edinburgh Council [2012] UKEATS/0061/11/B1
There can only be a service provision change if employees were deliberately grouped together by the outgoing service provider in a team dedicated to delivering the activities under the service contract. There will be no transfer if workers were grouped randomly, or organised to suit the service provider’s own convenience. This is because TUPE is supposed to operate in a clear and predictable way, especially since its effect, where it applies, is to change the identity of the employer automatically:
Eddie Stobart ran a warehousing and logistics business distributing meat between suppliers and supermarkets. Stobart lost the distribution contract for one supplier, Vion. As a result of the timing of Vion’s supermarket orders, picking and packing on the Vion contract was mostly done by the day shift, while the night shift worked mainly on a different contract. In practice, the pickers had no idea whose goods they were packing and Stobart organised the work like this just because of the time of day when Vion’s own customers normally placed orders and to suit shift patterns and working practices at the warehouse. Vion’s service contract did not require work to be organised in this way. There was no “dedicated Vion team” at Stobart.
There was no service provision change in this case, said the EAT. A valid service provision change requires a group of employees to have been deliberately organised into a team to service the requirements of a particular client under a service contract. Where it applies, TUPE changes the identity of the employer. TUPE cannot apply to change the identity of someone’s employer just because they happen to work the night shift as opposed to the day shift.
Eddie Stobart Limited v Moreman & Others [2012] UKEAT/0223/11
The activities must be the group’s main task (“principal purpose”), although they need not be their only task.
An organised grouping of employees can be made up of just one person (regulation 2(1), TUPE), as long as he or she is the only person employed to provide the activities under the service contract. Someone can be “assigned” to an organised grouping even if they are the only person in that “grouping” (Rynda (UK) Limited v Rhijnsburger [2015] EWCA Civ 75).