The issue in this case was whether there could be a Service Provision Change if both the client and the service provider change. The Court of Appeal held that there could not be.
The Facts
The facts are complex but simplified they are as follows: M was employed by WCP. WCP managed a property portfolio for Waterbridge. That portfolio was taken over by receivers. The receivers appointed a new property management company, KS, and the property management services ceased to be carried out by WCP. M, with two of his colleagues, then became employed personally by H. They were made available by H to assist KS in the management of the properties but they were not employed by KS, nor by the receivers. Subsequently M was dismissed and claimed that his dismissal was unfair.
M contended that there was a Reg 3(1)(b) transfer of a service provision effectively from WCP to H when he and his two colleagues left WCP to become employed by H and were allocated the property management work. It being argued that the property management function had ceased to be carried out by WCP and was now carried out by H on behalf of a client.
M’s alternative case was that even if that was not a service provision, the employment by H of the three individuals constituted the transfer of a business from WCP within Reg 3(1)(a) TUPE Regulations.
It was necessary for M to establish a TUPE transfer because without this he had insuffiicient continuity of service with H to bring an unfair dismissal claim.
The ET held there was a Service Provision Change but not an old style transfer.
The Court of Appeal
The EAT and the Court of Appeal held; that in order for there to be a Service Provision Change the client must stay the same. Here the client did not stay the same. As Reg 3(1)(b) was domestic legislation and did not result from the Acquired Rights Directive a purposive construction of ‘client’ was not permissible even if it was warranted.
Comment
It will be interesting to see if this decision heralds creative structuring of group companies so that the client changes when a service is brought back in house or retendered and if it does whether that would be permitted.