Thursday 21st August 2014
Two recent EAT decisions have provided some further clarity on the application of TUPE.
In Horizon Security Services Limited v (1) Ndeze (2) The PCS Group, PCS provided security services for Workspace plc in relation to premises on a site owned by the London Borough of Waltham Forest. The site was taken back by the Borough and Horizon were engaged to look after the site for a short period pending demolition work. The PCS staff argued there was a service provision change pursuant to TUPE.
However, a service provision change requires that the client remains the same. As Horizon were working for the Borough, not for Workspace, the client’s identity had changed. In addition, the EAT were also satisfied that the Horizon contract fell within the short term duration exemption to the service provision change rules. As a result, TUPE did not apply to transfer the PCS staff to Horizon.
In the second case, Housing Maintenance Solutions Ltd v McAteer and others, the EAT has re-affirmed that a TUPE transfer takes place when responsibility for the management of the business or service transfers from one entity to another.
Kinetic provided repair and maintenance services to a housing association. Its contract was terminated on 9 June 2011 and staff were made redundant. The housing association set up a subsidiary company, HMS, to provide the services. HMS told Kinetics’ employees it would reemploy them, but only began to provide the services on 1 July 2011. A number of claims were lodged by the employees and it was necessary to establish which entity was liable.
The ET initially held that a TUPE transfer had occurred on 9 June, as HMS had "accepted responsibility" for the employees on that date. However, the EAT, applying Celtec v Astley, overturned the ET. The relevant date for TUPE was when responsibility for the business or service in question transferred, liability for the employees then followed; not vice-versa.
All information in this update is intended for general guidance only and is not intended to be comprehensive, or to provide legal advice.