TUPE service provision changes: how to spot an 'activity'

TUPE service provision changes: how to spot an 'activity'

Published:

Author: Kevin McCavish

The Employment Appeal Tribunal (EAT) has considered whether or not TUPE applied when taxi booking services were in-sourced

Background

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) applies where there is a 'service provision change' (SPC) as well as on a transfer of an undertaking.

In short, an SPC under TUPE may occur where there is an outsourcing, in-sourcing or change of contractor providing, services.

However, to decide whether or not TUPE applies or not in such cases, tribunals must first identify the 'activity' being carried out and those activities must be the same both before and after any alleged transfer.

In Metropolitan Resources Ltd v Churchill Dulwich Ltd [2009] IRLR 700, the EAT ruled that the activities need not be identical but must be 'fundamentally or essentially the same'.

Facts

The claimant worked for Johnson Controls Limited as a taxi administrator taking bookings for taxis from clients as well as performing other administrative tasks such as checking invoices. One of the clients was the UK Atomic Energy Authority (UKAEA) and it decided to in-source the service by using its own secretaries to book taxis directly with taxi firms rather than using Johnson Controls. The claimant argued that 80% of his time was taken up with UKAEA work.

The claimant brought claims for unfair dismissal and a redundancy payment and the tribunal was asked to rule as a preliminary matter on whether the claimant's employment had transferred under TUPE to UKAEA.

Decision

The tribunal found that UKAEA was not performing essentially the same service as Johnson Controls which had carried out the taxi booking service in a centralised and co-ordinated way. This service no longer existed when UKAEA secretaries undertook the bookings on an ad hoc basis.

The EAT upheld this decision on appeal.

The tribunal had stressed that the service being provided by Johnson Controls was more than the sum total of the list of activities or tasks undertaken. The EAT considered that the tribunal had been entitled to reach its decision it had on this basis and that it was not just a question of whether the majority of tasks performed are the same both before and after the alleged transfer,

'.identifying what an activity is involves an holistic assessment by the Tribunal.'

Comment

In the current economic climate bringing services back in-house is becoming more common. This case is a good reminder that TUPE will not always apply in such situations. However, each case will turn on its own particular facts. By taking an holistic, impressionistic approach, as endorsed by the EAT in this case, tribunals are less likely to be swayed by the simple percentage of similar tasks performed before and after any putative transfer.