{"id":979,"date":"2016-04-11T16:09:02","date_gmt":"2016-04-11T16:09:02","guid":{"rendered":"http:\/\/www.tayloremmet.co.uk\/blogsite\/?p=979"},"modified":"2016-04-11T16:09:02","modified_gmt":"2016-04-11T16:09:02","slug":"recent-developments-tupe-service-provision-changes","status":"publish","type":"post","link":"https:\/\/www.tayloremmet.co.uk\/blogs\/recent-developments-tupe-service-provision-changes\/","title":{"rendered":"Recent Developments in TUPE – Service Provision Changes"},"content":{"rendered":"

\"\"<\/a>Before the concept of “service provision changes” was introduced into TUPE in 2006, the case law had developed over many years in relation to “traditional” business transfers. This included consideration of tricky issues such as whether a temporary cessation of the business is sufficient to prevent TUPE applying and whether TUPE applies on the transfer of part of an undertaking. \u00a0It has remained an open question as to how these principles may apply to service provision changes where, rather than a business undertaking, we are looking at “an organised grouping of employees” who are in some way dedicated to performing “activities” on behalf of a client. We are now starting to see the case law answer these questions.<\/p>\n

In the case \u00a0of\u00a0Arch Initiatives v Greater Manchester West Mental Health NHS Foundation Trust & ors<\/span><\/u>\u00a0<\/em>the EAT has held that it is not a prerequisite of a TUPE transfer that the whole<\/strong> of a service must transfer for the service provision change principles of TUPE to apply.<\/p>\n

Here, Bolton Council contracted the provision of services to alcohol and drug dependent adults.\u00a0 These services were provided by the Greater Manchester West Mental Health NHS Foundation Trust until 31 December 2012.\u00a0 The services were divided up into two main parts; case management services and delivery of interventions, which were undertaken by one team of employees.\u00a0 When the work was retendered, Arch Initiatives were successful in securing the case management function, and Lifeline Project were awarded the delivery of interventions function.<\/p>\n

The employees of Greater Manchester who had been carrying out the case management services argued that their employment transferred to Arch Initiatives on 1 January 2013.\u00a0 Arch disagreed that a TUPE transfer had taken place and refused to accept the employees.\u00a0 The employees therefore brought a claim, arguing that they had been unfairly dismissed.<\/p>\n

The Tribunal agreed with the employees that a service provision change had occurred.\u00a0 It found that there were two organised groups of employees and that the majority of these employees (barring one nurse in alcohol services who was assigned solely to the second organised grouping) should have transferred to Arch Initiatives.\u00a0 Despite the fact that TUPE expressly confirms that part of an “undertaking” can transfer, Arch Initiatives sought to argue that there was no equivalent provision which relates solely to a service provision change (namely that “part” of a service could not transfer; it should be an all-or-nothing approach).<\/p>\n

The EAT disagreed with Arch Initiative’s argument and pointed out that it was not part of a service that had transferred in these circumstances; in fact, it was two distinct arms of a service which were capable of amounting to two separate activities. Accordingly, all of the affected employees should indeed have transferred across to Arch Initiatives. It is worth noting that the term used in TUPE is “activities” and not the service or services and they do not necessarily mean the same thing.<\/p>\n

In a decision of the EAT earlier this year they confirmed in the case of Mustafa and another v Trek Highways Services Ltd and others<\/span><\/u><\/span><\/em> that there was a service provision change where there was a temporary cessation of work immediately prior to the transfer.\u00a0 In this case, Amey was appointed by Transport for London to conduct its road maintenance services until 31 March 2013.\u00a0 Amey subsequently subcontracted part of this work to Trek Highways Services Ltd.\u00a0 In 2012, Transport for London re-tendered the work, which was awarded to Ringway Jacobs and FM Conway, with the new contracts due to start on 1 April 2013.\u00a0 However, in early March, a dispute between Amey and Trek Highways\u00a0resulted in Trek Highways suspending its operations and sending its employees home.\u00a0 Three weeks later on 21 March 2013, the contract was terminated.\u00a0 Trek Highways\u00a0informed its staff that they would transfer to Amey and went into administration shortly afterwards.<\/p>\n

When the employees reported for work at Amey\u00a0on 27 March 2013, they were turned away (and were also rejected from Ringway).\u00a0\u00a0Amey sought to argue that TUPE did not apply to the transfer, as the contract was terminated as a result of a commercial disagreement, and not because the contract was terminated by Transport for London which could have resulted in a TUPE transfer.><\/p>\n

The EAT found that the fact that the\u00a0subcontract was terminated by consent 12 days before the new contract was due to commence did not preclude a transfer from having taken place.\u00a0 This case emphasises that a temporary cessation of work is only one of the factors to be taken into account when determining if there has been a relevant transfer.\u00a0 The ET here failed to have adequate regard to the length of the cessation and the reasoning behind it and solely concentrated on the cessation of the contract itself, meaning that it lost sight of the fact that the business entity still existed, even if the activities themselves had temporarily ceased.<\/p>\n

These cases are an important reminder to take into account all of the circumstances as to how, when and why\u00a0relevant activities are carried out before attempting to decide whether or not TUPE applies. Service provision changes do not always have to be all or nothing and sometimes it is possible for a service to be split into two or more parts and for TUPE to apply (unless of course the service becomes too fragmented to sensibly determine which employees would go where). \u00a0A temporary cessation in the service may not be sufficient to prevent TUPE applying either.<\/p>\n","protected":false},"excerpt":{"rendered":"

Before the concept of “service provision changes” was introduced into TUPE in 2006, the case law had developed over many years in relation to “traditional” business transfers. 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