Stobart operated a logistics depot which it used to store processed and unprocessed meat which it would then deliver to suppliers. In 2009 when it closed the depot there were two customers F and V. Stobart believed the work it did for V would be taken on by FJG and this would be a Service Provision Change (‘SPC’) within Reg 3(1)(b). It identified those employees who spent most of their time working on the V contract and told those employees that they had transferred to FJG. FJG refused to accept that they had transferred.
At issue was whether the group of employees fulfilled the necessary conditions for an SPC as set out in Reg 3(3) and particular whether immediately before the SPC:
There is an organised grouping of employees situated in Great Britain which has as its principal purpose the carrying out of the activities concerned on behalf of the client;
In many cases employees will spend all of their time servicing a particular contract because of the way their employer has organised its business. In such cases the individuals may receive specific training about the requirements of that particular client. They may be identified separately by team name etc.
In Stobart, although the evidence showed that the employees concerned spent most of their time on the V contract, this was coincidence or serendipity and it was not the product of any organisation by Stobart but rather a function of the time of day that V’s customers chose to place their orders. The employees did not consider themselves as being assigned to one contract. These factors meant that there was no reasonable prospect of success in establishing the existence of an organised grouping of employees.
The EAT held (para 18) that the requirement of an organised grouping:
“necessarily connotes that the employees be organised in some sense by reference to the requirements of the client in question. The statutory language does not naturally apply to a situation where, as here, a combination of circumstances – essentially, shift patterns and working practices on the ground – mean that a group (which, NB, is not synonymous with a “grouping”, let alone an organised grouping) of employees may in practice, but without any deliberate planning or intent, be found to be working mostly on tasks which benefit a particular client. The paradigm of an “organised grouping” is indeed the case where employers are organised as “the [Client A] team”, though no doubt the definition could in principle be satisfied in cases where the identification is less explicit.”
As with all cases context is everything and it will always be a question of fact and degree as to whether the grouping is the product of organisation.
Comment
This case does raise the issue of what is the position if in the weeks leading up to the transfer the the employer introduces the necessary degree of organisation so that that by the date of the SPC there is an organised grouping of employees within Reg 3(3).