![[Basket]](images/basket.png){kind=small}
Your order![[cover image]](images/issue/BK201905.jpg)
Similarity of activities
To have a valid service provision change, the activities carried out before and after the change must be “fundamentally the same”. To test this, the first step is to identify the “services” being transferred and the “activities” making up those services. What matters is that the “substance” of what is being transferred is fundamentally the same:
A cardboard manufacturer decided to end its haulage contract with its existing transport provider and to switch to a new service provider known as Qlog. Qlog signed a service agreement accepting responsibility for transporting all the manufacturer’s goods, without specifying how this would be achieved. The old haulage company had used its own drivers and vehicles, but Qlog owned no vehicles or employees. Instead, it planned to perform the contract using a computer system that matched the client’s delivery requirements to “self-employed” drivers, using their own vehicles to provide the services.
There was still a service provision change, ruled the tribunal. This was because Qlog’s contractual obligation under the service agreement was to transport the goods. Its contractual obligation was effectively the same as that owed by the outgoing contractor. As a result, all the HGV drivers employed by the outgoing contractor should have transferred automatically to Qlog under TUPE.
The EAT agreed with the tribunal, ruling in particular that the tribunal was entitled to rely on Qlog’s own contract documentation to identify the activities Qlog had agreed to provide and to conclude that those activities were substantially the same as the activities contracted by the outgoing haulage provider. The drivers could bring claims for automatically unfair dismissal, failure to consult and unlawful deduction of wages against Qlog.
Qlog v O’Brien [2014] UKEAT/0301/13/2103
As long as core activities stay fundamentally the same before and after the change in service provider, multiple minor differences introduced by the new provider should not prevent TUPE applying (regulation 3(2A), TUPE, as amended).
Here are some examples from decided cases:
• there was no service provision change when a contract to provide a full catering service was replaced by a contract to provide “dry goods kiosks” (OCS Group UK Limited v Jones [2009] EAT/0038/09); and
• there was no service provision change when an NHS residential care facility closed and was replaced with independent living in the community supported by staff at two charities (Nottingham Healthcare NHS Trust v Hamshaw [2011] UKEAT/0037/11).
In both cases, TUPE did not apply because the activities were not fundamentally the same before and after the transfer.
Tribunals must give the word “activities” its ordinary, common sense meaning and resist a too narrow and pedantic interpretation which could allow the new employer to escape responsibility for the existing workforce when a service contract changes hands (The Salvation Army Trustee Company v Coventry Cyrenians Limited [2016] UKEAT/0120/16).
“Activities” are not limited to those that are contractually guaranteed under the service agreement. Any work that is anticipated and regularly provided can be included even though it is not contractually guaranteed (Lorne Stewart v Hyde [2013] UKEAT 0408/12/0100).