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Organised grouping of employees
[ch 12: pages 453-455]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 were engaged in delivering the “activities” covered by the service contract immediately before the transfer will transfer. Anyone whose main task is to perform wider organisation-wide activities, such as human resources or strategy, will not transfer, even if delivering the service contract was the organisation’s only activity. For example:
Edinburgh Council contracted out its homeless support services to a voluntary organisation. When the council later took the contract back in-house, everyone who was, engaged in front-line service delivery transferred to the council. By contrast, 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 where employees were deliberately grouped together by the outgoing service provider in a team dedicated to the delivery of the activities to the client. There will be no transfer where workers were grouped randomly, or organised to suit the service provider’s own convenience, such as shift scheduling. For example:
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 its contract was mostly done by the day shift, whereas the night shift worked mainly on a different contract. In practice, however, pickers had no idea whose goods they were packing. Work was organised like this because of the time of day when Vion’s own customers tended to place orders, and to suit the 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. TUPE is supposed to operate in a clear and predictable way. It would not be appropriate for an employer’s identity to change automatically every time a service contract ends just because employees happen to be randomly assigned to it, for example, to a night shift as opposed to a day shift.
Eddie Stobart Limited v Moreman & Others [2012] UKEAT/0223/11
The activities must be the main task (“principal purpose”) of the group, although they need not be their only task.
There will be no service provision change if the activities are not the group’s main task, even if they are the only task of a few members of the group. For example:
One team member in a group of employees at a freight forwarding company spent 100% of his time fulfilling the service contract of a single client, Seawell. However, servicing the Seawell contract was not the main task of the group, because it looked after several different clients. When Seawell took its contract back in-house, the employee’s contract did not transfer under TUPE, even though he spent 100% of his time working on it.
CEVA v Seawell Limited [2013] CSIH 59
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.
An organised grouping of employees can include 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).