There can be multiple transferees under a ‘service provision change’ for TUPE

In the recent Employment Appeals Tribunal (‘EAT’) joint case of McTear Contracts Ltd v Bennett others and Mitie Property Services UK Limited v Bennett and others, the EAT held that where a service provision change (‘SPC’) applied, there could be multiple transferees. Where there are multiple transfers, the employees should transfer to whichever transferee are taking over the bulk of activities undertaken by the employee pre-transfer. Sometimes it may be possible for the employment contract to be split between the two transferees as long as parts of the role are easily divisible and identifiable.

The Case Facts

The original employer, a contractor business AS Ltd, was undertaking work for North Lanarkshire Council, replacing some kitchens. Two teams of employees worked for AS on this project as two distinct teams. The Council retendered the work and split the work contracts between two companies McTear Contracts and Mitie Property Services, the split was made along a geographical line.

The Employment Tribunal (‘ET’) held that there had been a SPC and allocated the employees to McTear Contracts and Mitie according to which team they were in.

Both companies appealed to the EAT on the grounds that they believed that the employees had been allocated incorrectly and they submitted that in any event the ET should have considered the possibility that the employees transferred to neither company.

Outcome

The EAT allowed the appeal on the grounds that where there is a SPC, the employees can transfer to multiple transferees. The EAT applied the principle in the European Court of Justice judgment in ISS Facility Services NV v Govaerts, as SPC principles are dealt with by the national jurisdictions it would be undesirable to not follow the judgment principles.

The EAT also held that it isn’t out of the question that an individual employee could be transferred to both transferees under two separate contracts, provided that the “work attributable to each contract is clearly separate from the work on the other(s) and is identifiable as such.”

Implications

This ruling highlights the importance of a robust TUPE process so the transfer, any transferees and the employees are clear about which employees are transferring over and why. TUPE is a complex area of law, as such we advise anyone undergoing any TUPE exercise to contact one of the Employment Team for advice.

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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