TUPE

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Swanbridge Hire & Sales Ltd v Butler EAT – 13 November 2013

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The issue in this case principally concerns the meaning of Reg 3(3) and the intention of the client that activities following the transfer will be carried out by the transferee other than in connection with a single specific event or task of short term duration.

The Facts

S subcontracted to K the provision of labour to insulate and clad 5 boilers and pipes at a power station in Pembrokeshire.   S became dissatisfied with K and negotiated with Swanbridge for Swanbridge to take over the insulation of boilers 4 and 5.  K regarded this as a repudiatory breach and withdrew their employees from the site.     On 5 October 2011 S informed K  that the whole contract for all boilers was terminated.  On 6 October K informed Swanbridge TUPE applied and that all of its employees working on the boilers were now employed by Swanbridge.  Swanbridge hired 37 out of 39 of the employees.   The work on all 5 boilers was completed in May/June 2012 and had lasted about 18 months.    B and others brought claims against K for notice pay, outstanding wages, holiday pay and expenses and claims were also brought for protective awards.   K contended that there was a Service Provision Change (SPC) under Reg 3(1)(b)(ii) to Swanbridge.

The ET Judgment

The ET held there was an SPC as the works were lengthy and protracted and could not be regarded as short term.

The EAT Judgment

The EAT held that the ET was required to make findings on the following issues:

(1)  The intention of S at the time of the SPC to Swanbridge.

(2)  Whether the activities to be carried out by Swanbridge were in connection with a single specific event or in connection with a task.  Identifying in each case what was a a task and what was an event.

(3)  Whether that single event or task was of short term duration.

The issue is not whether the client intends the activities to be of a short term duration but whether the intention is that the activities be carried out in a connection with a task or an event of short term duration.   The ET was required to make findings on this issue and in this case had not done so.  Whilst it might in some circumstances, where direct evidence is lacking , be possible to infer the intention from the duration of the task or event, here the ET had impermissibly taken into account the period that the task was being undertaken by K before the transfer.   The ET is required to determine what the client’s intention was at the time of the SPC not at the commencement of the task or event, the undertaking of part of which may predate the SPC.

The EAT also preferred the judgment of Langstaff P in SNR Denton v Kirwan  in which he held that short term duration qualifies both tasks and events over the judgment of Lady Smith in Liddells Coaches v Cook in which she held that it qualified only tasks and not events.

Comment

The issue to focus on in respect of Reg 3(3) is – how long did the client intend that the task or event to take after the SPC?   There will usually be direct evidence of this.  If there is not it is permissible to draw inferences from the length of time the task or event actually took, provided that any time  spent on the event or task before the SPC is ignored.

Link to judgment

 

 

 

 

 

 

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