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No change in commissioning client
[ch 12: pages 451-452]There can only be a TUPE transfer if the same client commissions the services, before and after the change in service provider. If a new client contracts the services, for example, a receiver in place of the original client, TUPE will not apply (McCarrick v Hunter [2012] EWCA Civ 1399).
Several new cases have tested what this means in practice:
CT Plus, a subsidised bus service, ran a park-and-ride service for the local council until commercial operator Stagecoach decided to run buses along the same route. As a result, the council terminated the government subsidy to CT Plus since the service could no longer be justified. CT Plus folded. Stagecoach refused to take on the CT Plus buses or drivers.
The EAT confirmed that there was no service provision change, because although CT Plus was no longer providing services for the council, Stagecoach was not providing services for the council. Instead, it was a private operator. It was not taking over the running of a council service contract from CT Plus, so TUPE did not apply.
CT Plus (Yorkshire) CIC v Lincolnshire Road Car Limited [2016] UKEAT/0035/16
In a recent important case, Duncan and Warwick Estate Properties Limited v Ottimo Property Services Limited [2015] UKEAT/0321/14, the EAT has ruled that “client” can refer to several clients, as long as they are sufficiently linked for there to be a “common intention” for the new service provider to continue providing the services:
Who is the “client” is a question for the tribunal to decide after looking at all the facts. Sometimes, where services have been sub-contracted, the ultimate client could be the principal in a long chain of contractors and sub-contractors (regulation 1(2), TUPE). And sometimes, one organisation could be the agent for another (see Horizon Security Services Limited v Ndeze [2014] UKEAT/0071/14/JOJ).
Havering Council contracted out the management of a car park to a company, Saturn, which in turn contracted it to a sub-contractor, Regal. The council later took back control of the car park, closed it down and granted a licence to an NHS Trust to use it for its staff, before eventually turning it into a public car park.
An employee of Regal claimed that his employment transferred to the council, but the council disagreed. However, the EAT took the view that the council could be the real or “ultimate” client that commissioned the car parking services from Regal. If so, TUPE would have applied to transfer the claimant’s employment to the council. The case was sent back to the tribunal to work out who was the true client in this case.
Jinks v London Borough of Havering [2015] UKEAT/0157/14