TUPE

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Lorne Stewart Plc v Hyde EAT – 1 October 2013

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This case raises two points on Reg 3(1)(b) Service Provision Changes (SPCs). First, If there is no contractual obligation on the contractor to perform particular work for the client before the transfer but that work is nevertheless undertaken, do the employees engaged in that activity transfer if the expectation is that it will continue? Second, does it matter if the activity is not actually being undertaken at the time of the transfer?

 

The Facts

The Claimants H and C worked for Carillion. Carillion had a contract with the Cornwall Council from 2007 until 2011 to provide heating and boiler installation services (‘the contract’). On 1 April 2011 LS took over the contract following a successful tender. Both employees worked principally on the contract. LS took a number of employees from Carillion on the transfer but, having initially told H and C that they would transfer, refused to permit them to do so.

The contract was in the nature of a framework agreement by which the Council could call on services as and when required. There were 5 different categories of work under the contract. Two of these categories were: repairs and renewals in excess of £250; and large scale repairs (‘project work’). Whereas the Council was obliged to give Carillion the other categories of work under the contract it was not obliged to give Carillion the work in these two categories and Carillion was not obliged to accept it if offered. In practice, however, Carillion did receive all such work and did undertake it. The tendered contract was materially the same.

C carried out minor repair work and the replacement of minor equipment which was not within the contract either before or after tender and H performed project work. LS took the view that both H and C were engaged in work that was not work that Carillion were contractually required to perform and nor was it, and therefore H and C did not transfer.

The ET

So far as C was concerned the Tribunal held that this work was work that was anticipated within the contract and therefore C transferred to LS. H was slightly different because large project work was not within the general kind of work undertaken pursuant to the contract. Nevertheless it was work that Carillion had undertaken and it was the expectation of the Council and LS that LS would do so. Therefore H carried on activities which ceased to be carried on Carillion and were instead carried on by LS and he also transferred to LS.

 

The EAT

LS appealed on two grounds: (1) That the Tribunal were wrong to find that activities in which there was no contractual obligation to undertake could transfer, particularly as those activities were not being undertaken at the time of the transfer. (2) that the Tribunal had failed to identify the activities carried on by Carillion which were then carried on by LS which had to be fundamental or essentially the same.

The EAT dismissed the appeal. It restated (yet again!) that Reg 3(1)(b) and (3) do not need judicial construction; they are straightforward words. The questions that have to be asked are most recently summarised in Enterprise Management Services v Connect up Ltd.

 

As to ground (1); The point that there was no contractual obligation to perform the work was not maintained with any force by LS at the EAT but if had been the EAT stated that it would have decided the point against LS. All that mattered was whether as a fact, the work was being done. It was also not in law necessary for C or H or anybody else actually to be carrying out the type of work that was said to have been subject to the service provision change on the day or in the days before the transfer and on the day or during the days after the transfer provided that it had been carried on and was going to be carried on.

As to ground (2) the tribunal had made sufficient findings of fact that both employees had been engaged in work for Carillion before the transfer which was work that it was expected LS would undertake after the transfer.

 

Link to judgment

 

 

 

 

 

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