This case concerns the meaning of ‘client’ and ‘contractor’ within Reg 3(1)(b) Service Provision Changes.
The Council owned a car park adjacent to Romford Ice Rink. It contracted the management of the car park to S Ltd. S Ltd sub contracted the management to R Ltd. The Ice Rink closed in mid April 2013 and at the end of April 2013 S Ltd gave up the site to the Council who took control of it and closed the car park. It then licenced the car park to an NHS Trust for a short period before converting it after a few months for public use. C was initially employed by S Ltd but from mid April 2103, i.e before the putative transfer, his employment transferred to R Ltd. His case was that his employment had transferred to the Council when the Council took the management of it back in house.
The ET Decision
The EJ struck out the C’s claim on the basis that the Council was never R Ltd’s client. R Ltd’s client, he held, was S Ltd. It was S Ltd on whose behalf R Ltd, as contractor, were operating the car park. Consequently only S Ltd could be the client for the purposes of Reg 3(1)(b).
The EAT decision
In order to succeed on his appeal and proceed with his claim C had to show an arguable case that the Council was R’s client. The EAT (Mr Recorder Luba QC) first noted that the definition of ‘contractor’ in Reg 2(1) included sub-contractors. He then noted and restated that the activity before and after transfer must be undertaken for the same client. (see SNR Denton v Kirwan and Hunter v McCarrick).
The EAT held that the question that had to be answered was, prior to the alleged transfer, on whose behalf was R Ltd operating the car park. Could it have been the Council? The fact that R Ltd did not have a contract with the Council was, relevant, but not determinative, of this issue. There could in an SPC where there was more than one client. This principle together with the extended definition in Reg 2(1) which defined contactors to include sub contractors was sufficient to establish that the case that the true client was the Council was arguable and should not have been struck out.
The recent case law (see also Ottimo Property Services v Duncan) on the meaning of ‘client’ demonstrates that the SPC provisions may have wider reach than previously assumed. In particular, a careful analysis of on whose behalf it is that the transferred activity is being undertaken is required.