This is a Service Provision Change Case (SPC). At issue was:
(i) Whether the same activities that were being performed by the transferor continued to be performed by the transferee and, if they did;
(ii) Whether the Claimants were assigned to an organised grouping undertaking the relevant work.
MJT had a contract with Taunton Deane BC (the Council) to inspect, maintain and repair the gas installations in the Council’s housing stock. The ET found that there were three aspects to the work undertaken by MJT: (i) Repeat Servicing work – maintenance and servicing of heating systems within the contract; (ii) Repeat Installation work – replacing or upgrading existing systems. This work was subject to a schedule or rates and whilst there was no guarantee of the work if MJT quoted within the schedule they would be given it, and; (iii) New Installation work – this was one off project work for which the Council tendered separately.
In April 2012 MJT lost the contract to Alhco (A). Some of MJT’s staff transferred to A others did not. A’s case was that it was only contracted to undertake the Repeat Maintenance work and there was no guarantee it would secure the Repeat Installation work that MJT had previously undertaken. Similarly, as the New Installation work was the subject of separate tendering arrangements there was no guarantee of this work.
The ET judgment
The ET held:
(i) That the activities which formed the Repeat Servicing and the Repeat Installation work had transferred but that which formed the New Installation work had not. The ET’s reason for finding the Repeat installation work had transferred was that, as a matter of fact, after the transfer, A had continued to undertake the same Repeat Installation work as MJT had previously undertaken in accordance with the agreed schedule of rates.
(ii) That the Council contract was MJT’s most important contract and the largest aspect of its business. MJT had an organised grouping that carried out the Council’s work and the claimants were assigned to that organised grouping of employees (Reg 4(1))
The EAT judgment
A appealed against the finding that the Repeat Installation work had transferred on the ground that the ET had looked at what had happened ‘on the ground’ rather than examining the contractual obligations and the position immediately before the transfer. This was a similar, if not identical, argument as that which was advanced in Lorne Stewart plc v Hyde. It failed for the same reasons.
It is not essential, or even necessary, that the activities that transfer have to be covered by the contract. Activities may transfer if they are being undertaken by the transferor immediately before the transfer even if they are outwith the contractual arrangements. In fact here the same arrangements were in place in the contractual documents before and after the transfer albeit that they were more explicit after the transfer. The ET was entitled to look at the position on the ground both immediately before and immediately after the contract.
A also appealed on the ground that ET: Failed to identify the extent of the organised grouping; failed to indicate how it was organised, or; why each of the Claimants was assigned to it. The EJ had failed to apply the requirements of the Eddie Stobart case to identify whether there was in fact any group at all and, if there was, whether the grouping had in fact been organised or whether it had arisen by happenstance. The EAT agreed – the ET had simply failed to adequately explain the reasons for the finding that there was an organised grouping of employees who were assigned as well as how that organised grouping was organised or became separately identifiable.
The case was remitted to the ET.
The key issues arising out of this case are: (i) it is necessary to look at the position on the ground to see if activities are fundamentally the same before and after the contract and (ii) it is necessary to identify an organised grouping of employees who are assigned to the organised grouping.