Outsourcing & TUPE. Further Changes & Uncertainty. Effective Solutions for Individuals & Businesses



Similar documents
TUPE 2006 Detailed Analysis

TUPE STEVEN FLYNN. Barrister. St John s Buildings. June 2015 St John s Buildings 1

Employment Law and Change a TUPE Update

LEGAL UPDATES AND FACTSHEETS

DENTAL ACCESS PROGRAMME GUIDE TO THE USE OF SCHEDULE 18 (STAFF TRANSFER) AND TUPE TRANSFERS UNDER THE PDS PLUS AGREEMENT

The EC3\Legal Guide to TUPE

2014 changes to TUPE

Transfer of Undertakings. (Protection of Employment) Regulations 2006

Welcome to NeTWork, your Employment Law Newsletter from Taylor Walton Solicitors

TUPE Redundancy Restructuring

THE TRANSFER OF UNDERTAKINGS (PROTECTION OF EMPLOYMENT) REGULATIONS 2006

TUPE Regulations Staff contracts when you buy or sell a practice Advice Note 20

Employment Law Reform Workshop

Employment Law Guide

TUPE : The Transfer of Undertakings (Protection of Employment Regulations) 2006 A Brief Guide

Briefing note TUPE changes from 31 January 2014

TUPE FAQs. for property transactions

Employment Law. Jeremy Allin Sue Evans Emma Ladley. March 2013

Transfer of undertakings. Business owner/ manager briefing

VOIP HR Direct Fife Council June 2011 Page 1 of 10 MC70

TUPE. Due. Diligence. suitable. This Due. levels of NCVO. it should

TRANSFER OF UNDERTAKINGS. 1. Personal Injury and Insurance.2-6. Alemo-Herron v Parkwood Leisure Ltd SC 7-9

Services & Teams. Our Employment Service

Briefing on TUPE and Bristol Youth Links. 9 March Jeremy Harrison, Charity HR Simon Collinridge, Sherbornes Solicitors LLP Mark Hubbard, Voscur

FEBRUARY BLOG UPDATE ON TUPE UNFAIR APPOINTMENT REVIEW PERIOD

Employment Breakfast Briefing TUPE: Changes in Impact and Practicalities

The Transfer of Undertakings (Protection of Employment) Regulations 2006 ( TUPE )

Transfers of undertakings an introduction

MAYFIELD SCHOOL. Author: Torbay Human Resources [April 2011] Renewed 9 th November 2015

The Transfer of Undertakings (Protection Of Employment) Regulations 2006 "TUPE"

TUPE POLICY AND PROCEDURE FOR SCHOOLS / ACADEMIES

TUPE made Interesting! Ed Jenneson Ed Heppel Tuesday, 8 October 2013

Briefing Note. Transfer of Undertaking (Protection of Employment) Regulations Overview of the Regulations. Transfers Covered by the Regulations

Guides & Advice. Our Employment Service

Welcome to NeTWork, your Employment Law Newsletter from Taylor Walton Solicitors

New TUPE Regulations. Brochure More information from

Bindmans Employment News

Employment law solicitors

Acquired Rights Directive: A Practical Approach for Navigating European HR Laws

T.U.P.E. Transfers. Cathy Taylor 1 May May, 2015 British Medical Association

Employment Law Update - Heptonstalls Solicitors October 2015 Issue 178. Shaun Pinchbeck LL.B shaun.pinchbeck@heptonstalls.co.uk Tel:

Capitalising opportunities

2006 No. 246 TERMS AND CONDITIONS OF EMPLOYMENT. The Transfer of Undertakings (Protection of Employment) Regulations 2006

CWU SUBMISSION TO BIS CONSULTATION TUPE REGULATIONS 2006: CONSULTATION ON PROPOSED CHANGES TO THE REGULATIONS

EMPLOYMENT & IMMIGRATION LAW - MAKE IT TOP OF YOUR AGENDA. Employment & Immigration Law Make it Top of Your Agenda

PRINCIPAL EMPLOYMENT LAWYER

working together, stronger together working together, stronger together TUPE

GUIDANCE FOR EMPLOYED BARRISTERS. Part 1. General

Legal Masterclass: TUPE and Pensions

7 Bedford Row Presents: AN INTRODUCTION TO EMPLOYMENT LAW CPD ACCREDITED & AVAILABLE ONLINE. invitation

Legal advice and professional help

Welcome. Donna Gibb, HR Service Manager Elaine Masson, Senior Employment Trainer Empire

A GUIDE TO THE TRANSFER OF UNDERTAKINGS (PROTECTION OF EMPLOYMENT) REGULATIONS 2006

HR & OD POLICIES. TUPE Manager Q&A

Management Liability Policy

Consumer Code. for Home Builders. This document contains the Rules that govern the behaviour of Home Builders and Home Warranty Bodies

Public Sector Charities. Healthcare. Intellectual Property. Sports Construction & Engineering. Partnership. Pensions. Transport Education

Policy & Procedure. Specific Instructions to Tenderers for Contracted- Out Services relating to Transfer of Undertakings

Case Studies - Employment Law

TUPE: Frequently Asked Questions For Schools becoming an Academy

Wiltshire Council Human Resources. Improving Work Performance Policy and Procedure

TUPE Guidance for Social Care Managers. Guidance from the Voluntary Sector Social Services Workforce Unit

Amendments To Tupe: 4 Key Changes

Managing Stress & Absence in the Workplace. Effective Solutions for Individuals & Businesses

TUPE AND OUTSOURCING. Louise McCartney Charity Sector Procurement Group 15 th June 2011

Employment and Human Resource - Working With You

SPDS Conference 2011/ Alternative Business Models: What to look out for/ November 2011

Chapter 1 Background New TUPE

Employment Law Make it Top of Your Agenda

Welcome to Adare Human Resource Management s July 2007 edition of our HR Newsletter.

AND REDUNDANCY. Summary of the law on

Employment Law Services

Employment law changes for 2014 what do they mean for your business?

Overview of the Transfer of Undertakings (Protection of Employment) Regulations 2006

A summary of the law on: Unfair Dismissal and Redundancy

all BBi staff for their continuing hard work, dedication and expertise.

Defending An Employment Tribunal Claim

TUPE or not TUPE.

BUSINESS TRANSFERS. Barry Hough

Buying a business in Europe: understanding the employment issues and how to ensure a smooth acquisition. 9 June 2015

TUPE: in a nutshell. Newsletter 1 December 1 st

Subcontracting. Modules 5 and 6


TACKLING AND PROVIDING FOR TUPE IN THE CONTEXT OF PROCURMENT Peter Oldham QC

Wotton-under-Edge Town Council

Schedule 11. The Transfer of Undertakings (Protection of Employment) Regulations 2006

HR Focus August Welcome to this month s edition of HR Focus. Payments in lieu of notice the tax position

SPECIALIST HEALTH AND SOCIAL CARE SOLICITORS. QualitySolicitors Burroughs Day

General Functions Committee. Meeting Date 22 July 2013 Subject. Insource May Gurney Recycling TUPE Transfer StreetScene Director.

Dealing with disputes at work

Employment in community buildings

Income Protection Cover. Guide to making a claim

Simpson Millar LLP working with the South Yorkshire Police Federation

LEAD PROVIDER FRAMEWORK CALL OFF TERMS AND CONDITIONS

TUPE - The Latest. special reports

3. MISCONDUCT and GROSS MISCONDUCT The following list provides examples of misconduct which will normally give rise to formal disciplinary action:

HIRING,EMPLOYING & DISMISSING MIGRANT WORKERS - THE ESSENTIALS FOR UK HR

Neil Goodrum. He got to the nub of the issues very quickly and painlessly. Overview

HUNTINGDON

Transcription:

Outsourcing & TUPE Further Changes & Uncertainty Effective Solutions for Individuals & Businesses

Service Provision Change A Reminder of the Core Principles The 2006 Regulations apply to a "service provision change" where the conditions set out Regulation 3(3) are satisfied. "Service provision change" is defined as: (a) Where activities cease to be carried out by a person ("a client") on his own behalf and are carried out instead by another person on the client's behalf ("a contractor") ("outsourcing"); or (b) Where activities cease to be carried out by a contractor on a client's behalf and are carried out instead by another person ("a subsequent contractor") on the client's behalf; or (c) Where activities cease to be carried out by a contractor or subsequent contractor(s) on a client's behalf and are carried out by the client on his own behalf ("insourcing"). Effective Solutions for Individuals & Businesses

Service Provision Change A Reminder of the Core Principles The Regulation 3(3) Conditions: (a) Immediately before the service provision change there is an organised grouping of employees situated in Great Britain which has as its principal purpose the carrying out of the activities concerned on behalf of the client. (b) Immediately before the service provision change the client intends that the activities will, following the service provision change, be carried out by the transferee other than in connection with a single specific event or task of short-term duration. (c) The activities concerned do not consist wholly or mainly of the supply of goods for the client's use. Effective Solutions for Individuals & Businesses

Service Provision Change A Reminder of the Core Principles Applying the Regulation 4(1) Obligation: (a) Save as set out in (b) below, a service provision change shall not operate so as to terminate the contract of any person employed by the transferor who is assigned to the organised grouping of employees. (b) The employee has the right to object to being employed by the transferee. Effective Solutions for Individuals & Businesses

Service Provision Change A Reminder of the Core Principles The Key Questions: (a) Are the "activities" ceasing to be carried out by one person and subsequently being carried out by another person? (b) Is there an organised grouping of employees situated in Great Britain carrying out the "activities"? (c) If yes to (b), is the carrying out of the activities the principal purpose of the group? (d) If yes to (b) and (c), are there employees assigned to that group? Effective Solutions for Individuals & Businesses

A look at the relevant cases A. Activities 1. Discuss the facts of: (a) Enterprise Management Services v Connect-Up Ltd (EAT) (b) Johnson Controls Ltd v Campbell and Another (EAT) 2. Discuss the legal principles. 3. Practical Problems. (a) Incoming service providers will require information about the services the client previously received from the outgoing contractor or the services carried on by the client in house. (b) Information obtained via Employee Liability Information is limited. Effective Solutions for Individuals & Businesses

A look at the relevant cases B. Organised Grouping of Employees and Assignment 1. Discuss the facts of: (a) Eddie Stobart Ltd v Moreman and Others (EAT) (b) Argyll Coastal Services Ltd v Stirling and Others (EAT) (c) Seawall Ltd v Ceva Freight (UK) Ltd and Another (EAT) (d) Edinburgh Home-Link Partnership and Others v City of Edinburgh Council and Others (EAT). 2. Discuss the legal principles. 3. Practical Problems. (a) How a Service Provider organises its employees will determine whether or not TUPE will apply on termination of the contract. - are you at risk of unforseen redundancy costs on termination of a contract? - can you make changes as to how the employees are organised before the transfer takes place? Effective Solutions for Individuals & Businesses

A look at the relevant cases (b) For new contracts, Service Providers will need to assess how they will perform the contract and the TUPE exposure/redundancy costs before they enter into the contract. (c) What practical steps should you consider if you would prefer that your employees transfer with the contract: - Contracts of Employment (job titles, job description). - Records of hours worked by each designated employee for the client. - Notify the client of the designated team. - Updates for clients and employees. (d) The need to undertake due diligence before entering into a new contract: - Lack of information. - Ask the right questions. - Assess information received. - Raise further enquiries. Effective Solutions for Individuals & Businesses

Effective Solutions for Individuals & Businesses CASE STUDIES

DCT CASE STUDY 1 Car Moves Ltd ("C Ltd") has a number of contracts with car manufacturers to manage the car movements of their demonstrator fleet. In particular C Ltd has a contract with a luxury car manufacturer ("M Plc") to: (i) (ii) Manage the movements of the demonstrator fleet around its numerous branches in Great Britain; and Manage the delivery of demonstrator fleet cars to prospective corporate buyers of M Plc so that the corporate buyers can trial the vehicles before taking on vehicles as part of their corporate fleet. It is a requirement of the contract that the staff who deliver demonstrator fleet vehicles to corporate clients wear a uniform and personally show the vehicle to the prospective clients. M Plc has served notice to terminate the contract with C Ltd and whilst C Ltd has been invited to tender for the new contract, C Ltd is concerned that it may lose the contract. C Ltd has conducted a quick review of its staff and notes the following: 1. Car transporters are used to move M Plc's demonstrator fleet around its numerous branches. C Ltd has a car transporter fleet of 10 vehicles and employs 12 full time car transporter drivers. Two of the 12 drives are used to cover sickness and holiday and carry out other driving duties when not required. C Ltd believes that approximately 4-6 of its car transporter drivers work on the M Plc contract. 2. C Ltd employs a Logistics Manager, who is assisted by a team of 3 staff. As the M Plc contract is their largest contract, C Ltd believes that the staff spend more than 50% of their time on the M Plc contract. 3. C Ltd employs a full time mechanic and again C Ltd estimates that he spends more than 50% of his time on the M Plc contract. 4. C Ltd employs 45 drivers who drive vehicles to and from prospective customers for C Ltd's contracting car manufacturers. 20 drivers work on the M Plc contract. Discuss.

DCT CASE STUDY 2 You are employed by a warehouse and distribution company and you have been informed that the company is looking to tender for a large scale contract which will significantly boost the company's profits and reputation in the industry sector. The Contracts Manager is keen to press ahead and get numbers on paper to put in a really competitive bid. You have been asked to cover the "TUPE stuff" at the meeting with the prospective new client. 1. What questions do you want to ask of the client at the meeting? 2. The client informs you at the meeting that it believes the "activities" put out to tender are substantially different to those supplied by its existing contractor and therefore will not be giving any indemnities or covering any risk relating to TUPE. What questions do you want to ask? 3. Having ascertained at the meeting that the activities are not substantially different, what questions do you want to ask? 4. Despite having been given assurances from the client that the current contractor did not use a dedicated team, the current contractor has now written to you to inform you that they believe that 25 warehouse operatives, 15 drivers and a Transport Manager will transfer to your company on the transfer date. What questions should you ask of the current contractor?

Enterprise Management Services Ltd v Connect-Up Ltd and Others Facts Enterprise Management Services Ltd (EMS) provided IT services to Leeds City Council (LCC) under a framework agreement. The agreement gave EMS preferred bidder status amongst LCC schools, leaving schools free to source their IT needs by alternative means. EMS offered levels of service to LCC schools, a complete managed service for admin and curriculum matters (level A) and support for maintenance of a software systems (level B). EMS initially provided services to all LCC schools. In 2009 when the contract was put out to tender that had reduced to 80% and most schools had signed up for level B. The new contract was awarded to Connect-Up Ltd (CU) and there were differences between the old and new contracts, one of which was that the new contract excluded any services cover relating to curriculum matters. Work on curriculum matter represented about 15% of the work carried out by EMS staff. After CU took on the contract, it lost around 40% of the schools previously serviced by EMS to 5 other service providers. On 31 March 2009, EMS dismissed the employees who had been working under the framework agreement with LCC. EMS believed that the staff had transferred to CU. The employees dismissed by EMS brought claims in the employment tribunal on the basis that there been a service provision change and that their employment should have transferred to CU. Findings The employment tribunal found that there was no service provision change as there were significant differences between the activities carried out by CU when compared with the activities carried out by EMS. EMS appealed to the EAT against the finding that there had been no service provision change. The EAT agreed with the employment tribunal's decision on the basis that the activities carried out by CU and EMS were not essentially the same. The EAT gave the following guidance: o When considering service provision change, the first task is to identify the activities being carried out by the original contractor;

o The second task is to determine whether the activities carried out by the incoming contractor are essentially the same as those carried out by the original contractor. This is a question of fact and degree and minor differences can be disregarded; o Cases where there is a fragmentation of services after the change in contractor may fall outside the definition of service provision change. The EAT took the view in this case that an employment judge was entitled to find that there was a significant change in activities when some 15 per cent of the work done by EMS was omitted from the retendered contract awarded to a different contractor. Added to the fact that the retendered service was also fragmented among a number of different contractors, the retendering did not amount to a service provision change. Principles In order to determine whether there has been a service provision change, it is necessary to assess what activities were being carried out under the original contract and whether the activities being carried out under the new contract are essentially the same.

Johnson Controls Ltd v Campbell & another Facts Mr Campbell (C) joined Jonhson Controls Ltd (JC), a taxi booking service, in 1986 as a site supervisor. By 2007 his principal function was taxi administration services. C spent 80% of his time carrying out work for a client (UKAEA) which included taking bookings from its staff, advising on journey times, reviewing booking data, ensuring the best use of available transport, allocating jobs to taxi providers, checking invoices and maintaining a costs database and arranging security passes for suppliers. In 2010, UKAEA reviewed the taxi booking service and decided that secretaries could book taxis directly as required. When UKAEA cancelled the contract, JC argued that there had been a service provision change with the result that C's employment transferred to UKEAE. UKAEA disputed JC's assessment. C brought claims against both companies. Findings The employment tribunal conducted a pre hearing review to determine whether there had been a service provision change. The employment tribunal found that the core elements of the taxi booking service did not change when the secretaries took over taxi booking. However, the Tribunal stated that the service provided by JC Ltd was more than the sum total of the tasks that needed to be performed to secure taxis and that an important feature of the service was it was a centralised function which allowed, for example, taxi sharing. A central co-ordinated taxi administration services did not exist after the contract was cancelled so that the activities were not the same as the ones undertaken by JC Ltd. There was no service provision change. JC appealed to the EAT. The EAT stated that it was necessary to identify the relevant activity carried out by the original contractor in order to ascertain whether the client or the new contractor was performing the same activities. This is a question of fact and degree. The EAT accepted that the tribunal approach to the question of activities was correct on the basis that identifying an activity entails an holistic assessment by the Tribunal and does not simply mean listing tasks and identifying whether those tasks are the same after the alleged service provision change.

The Tribunal had been correct to conclude that the service provided by JC had been central and coordinated and that this was different from secretaries booking taxis on a required basis. Principles An activity must be assessed holistically and can be more than the sum of its parts. The issue of whether an activity is "essentially the same" after the alleged service provision change is a question of fact and degree.

Eddie Stobart Ltd v Moreman & Others Facts Eddie Stobart Ltd (ES) is a logistics business. It had a site at Manton Wood where it carried out warehousing and distribution services for meat suppliers. Until 2009, ES had 5 clients who it serviced at Manton Wood. In 2009 ES had just 2 clients left, F and V. F had one customer, a large supermarket chain. Most of the work for F was carried out by ES's night shift workers. V had a number of small customers. Most of the work for V was carried out by ES's day shift workers. ES closed Manton Wood in April 2009. It believed that V had arranged for all of its work to be carried out by FJG Ltd. ES informed employee who worked on the day shift that their employment had transferred to FJG Ltd on the basis that there had been a service provision change. ES's position was that the employees concerned were an organised grouping of employees whose principal purpose had been carrying out work on the contract with V. FJG Ltd refused to accept that there had been a service provision change. The employees were therefore dismissed by either ES or FJG Ltd. The employees brought claims for unfair dismissal against both companies. Findings FJG Ltd applied to have the claims struck out as having no reasonable prospect of success. At the pre hearing review to determine this issue the Employment Tribunal struck out the claims on the basis that there had been no organised grouping of employees whose principal purpose was carrying out work for V and therefore there was no service provision change. The employment judge commented that: o The work at Manton Wood had not been organised by reference to a particular customer but by reference to a shift system and job function. The tribunal considered that due to the fact that Manton Wood was a 24hour operation as a result of the needs of all customers, there would inevitably be some kind of shift pattern. o The fact that most staff found themselves working on one particular contract was not due to the fact that ES had organised the work so that

there were teams dedicated to that contract but because of the time of day that V's customers chose to place their orders. ES appealed to the EAT. The EAT considered that the essential question was whether it was enough for ES to demonstrate that the was a group of employee who worked mostly on tasks required by the contract with V or whether it was necessary for the employee to be organised as members of a "V team." The EAT held that Regulation 3(3) (a) (i) does not say that employee should in fact principally carry out work on the activities that transfer but that the carrying out of those activities should be the principal purpose of an organised grouping to which they belong. The employees do have to be organised in some sense according to the needs of the client. Principles In order for their to be an organised grouping of employees whose principal purpose is carrying out activities on behalf of a client, it is not enough for the employees to carry out the activities as a matter of fact. There must be evidence that the employer has deliberately organised the work by reference to the needs of a particular client.

Argyll Coastal Services v Stirling & Others Facts JAG Ltd, based in Scotland, contracted with the MOD to provide a vessel to deliver cargo in and around the Falkland Islands. It had 1 vessel, St Brandan, whose 11 crew were employed by a Guernsey based company, GSM for tax purposes. JAG Ltd also had 2 employees who carried out the admin work on the contract. In 2009, JAG Ltd's contract with the MOD expired and the MOD engaged a Dutch company, VWMS to provide four vessels to deliver cargo to the Falkland Islands. As VWMS only owned three vessels, it contracted with Argyll Coastal Services (ACS) to provide a fourth vessel and crew. The crew of the St Brandan and the two admin employee of JAG Ltd argued that there had been a service provision change and that their employment should have transferred to ACS under TUPE. Findings The Tribunal listed a pre hearing review to determine whether TUPE applied. The employment Judge found that there had been a service provision change as ACS Ltd was carrying out a service on behalf of the MOD and that the employment of the crew of the St Brandon and the two admin employees had transferred to ACS. ACS appealed to the EAT. The EAT stated that the Tribunal had not undertaken the analysis required by TUPE. The EAT stated that three elements needed to be satisfied before it could be said that a service provision change had occurred, namely, that there was an organised group of employees and that the principal purpose of that group of employees was carrying out activities on behalf of the client. The EAT made the following comments in relation to each of the three aspects: o Organised grouping seems to connote a number of employees deliberately organised for the purpose of carrying out the activities required by a particular client contract and who work together as a team; o The words "principal purpose" should be given their ordinary meaning and do not require the activities to be the "sole" purpose of the grouping. o In relation to activities, the key question was what exactly was the service contracted for?

The EAT remitted the case to a fresh tribunal to decide whether there had been service provision change. Principles In order for a tribunal to find that the employment contracts of employees have transferred as a result of a service provision change, it is necessary to meet the conditions set out in regulation 3(3)(a)(i) and then to consider whether the employees were in fact assigned to the relevant organised grouping of employees.

Seawell Limited v Ceva Freight (UK) and anor Ltd Facts Ceva Freight (UK) LTD (CF) carried out a business forwarding freight from its warehouse in Dyce and provided services to a number of clients who outsourced work to it. CF organised the workforce into 2 groups for inbound goods and outbound goods. Mr M was employed in the outbound group with 7 other employees. One of CF's clients was ND Ltd. ND Ltd supplied goods to offshore oil platforms and CF stored the goods at its Dyce warehouse and shipped goods to the platforms as required. In 2008, ND Ltd sold its business to Seawell Ltd (S) who informed CF that it would cease the outsourcing arrangements in due course. Mr M spent all of his time working on the contract with S. Four other employees in his group spent between 10% and 30% of their time on the S contract. By 2010 S had taken all of the storage and supply activities in-house. CF stated that Mr M's employment had transferred to S and told Mr M to report to S for work with effect form 5 January 2010. S denied that Mr M's employment had transferred. Mr M brought claims against both companies. Findings The employment tribunal found that Mr M's employment had transferred to S on the basis that Mr M constituted an organised grouping of employee whose principal purpose was to carry out activities on behalf of S. The tribunal acknowledged that 4 other employees were involved with the activities carried out for S but did not consider it necessary for them to be included in the organised grouping. The tribunal stated that if their analysis was wrong then all 5 employees were part of the organised grouping as together they ensured an effective service for S but that only Mr M was assigned to the grouping by virtue of the percentage of time spent working on the activities for S, namely 100%. S Ltd appealed to the EAT. The EAT overturned the employment tribunal's decision. The EAT stated that:

o the fact that a particular employee happens to spend all of his time on a particular client account does not, without more, mean that there is an organised grouping of employees. In this case there was no evidence that CF Ltd specifically formed a grouping consisting of Mr M to carry out work for S. o There was no basis for the tribunal's finding that Mr M and the 4 other employees were an organised grouping. There was no evidence that they had been deliberately organised by CF to provide services to S and the fact that a group of employee provides an effective service is not sufficient. o It must be the principal purpose of the organised group to carry out the activities concerned" on behalf of the client. In this instance S took over all of the aspects of the work carried out by 5 of CF's employees and not just the aspects carried out by Mr M. This meant that Mr M was not carrying out the activities concerned prior to the change but only aspects of them and he could not satisfy regulation 3(3)(a)(i). Principles When considering whether there is an organised grouping of employees whose principal purpose is carrying out activities on behalf of a client it is not enough to consider the activities which employees carry out. Instead, it is crucial to ask whether the employees have been organised according to the requirements of a particular client whose work is transferring.

Edinburgh Home Link Partnership and Others v City of Edinburgh Council and Others Facts Mr M and Mr AM were directors of the Edinburgh Home Link Partnership (HL), an organisation which provided services on behalf of the Council to vulnerable people who required support with housing. The Council decided to take some of the services back in house but refused to employ Mr M and Mr AM on the basis that they were not assigned to the organised grouping of employees carrying out activities on behalf of the Council. Mr M and Mr Am brought claims against the Council as they believed that their employment had transferred to the Council. Findings The employment tribunal rejected the directors' claims because they were not assigned to the organised grouping of employees carrying out work on the contract prior to the Council taking services back in house. The employment tribunal found that the directors had largely strategic roles concerned with maintenance of HL itself which were separate from the contractual obligations owed to the Council in relation to providing services. The directors appealed to the EAT arguing that the employment tribunal was wrong to focus on whether they were involved in the direct service provision. As they were responsible for employees who provided the services in a highly regulated area of activity, they were integral to the service provision and should have been found to be assigned to the organised grouping. The EAT rejected the directors' appeal. The EAT stated that it was not enough to show a link between an employee and the relevant client activity, the question is was the employee, prior to the transfer, assigned to the organised grouping of employees which was organised to have as its principal purpose the carrying out of the activities for the client contracted? In this case the EAT was satisfied that the directors were not assigned to the organised grouping as the tribunal had not been persuaded that the directors' day to day work was directed towards actioning the contract with the Council. In particular, the Claimant's had been unable to present any convincing evidence of their assignment.

The EAT referred to the fact that the directors' were largely concerned with tendering, and dealing with staff training and the Care Commission Principles Whilst it may be thought that all employees of an organisation who have one client would transfer to the client if the activities are taken in house, this may not be the case. The issue of assignment is a question of fact to be determined by the tribunal and a mere link to the client activity in question is not sufficient and enabling client activities is not in itself sufficient.

HR Workshop TUPE & Outsourcing Case Studies : Points to Note Case Study 1 In order for there to be a Service Provision Change under TUPE, amongst other factors, the outgoing contractor must be able to show that there is an organised grouping of employees situated in Great Britain which has as its principal purpose the carrying out of the activities concerned on behalf of the client. In this scenario, Car Moves Ltd will need to consider whether it will be able to show that the employees who have been working on the contract with M Ltd are an organised grouping which has as its principal purpose the carrying out of activities on behalf of the client. The Eddie Stobart case and the cases that followed, state that in order for there to be an organised grouping of employees which has as its principal purpose the carrying out of activities on behalf of the client, it is not enough for employees to carry out activities for the client as a matter of fact. There must be evidence that the outgoing contractor has deliberately organised the work by reference to the needs of a particular client. Below we have applied this principle to the various groups of staff: Car Transporter Drivers There are 12 car transporter drivers and Car Moves Ltd believe that 4-6 of them work on the M PLC contract. Although 4-6 of the 12 car transporter drivers spend time working on the M Plc contract, this does not appear to be as a result of any conscious effort on the part of Car Moves Plc to organise these drivers by reference to the needs of M Plc. On the basis that the 4-6 car transporter drivers carry out work for M Plc as a matter of fact rather than as a result of Car Moves Plc deliberately organising the work in this way, it is unlikely that there will be an organised grouping of employees which has as its principal purpose the carrying out of activities on behalf of the client. Logistics team Again, although the logistics team spends time working on the M Plc contract, this does not appear to be as a result of any conscious effort on the part of Car Moves Plc to organise these employees by reference to the needs of M Plc. As a result, even if the employees spend the majority of their time working on the M Plc contract, it is unlikely that there will be an organised grouping of employees which has as its principal purpose the carrying out of activities on behalf of the client. Full time mechanic Although one employee can be "an organised grouping" and the mechanic spends the majority of his time working on the contract with M Plc, there does not seem to be any evidence to suggest that Car Moves Plc have deliberately organised the mechanic's work around the needs of M Plc. In this scenario, the likely outcome is that the mechanic spends the majority of his time on work for M Plc because this was a major source of work for Car Moves Ltd rather than because the work had been deliberately organised in this way by reference to the needs of M Plc. As a result, it is unlikely that the mechanic will be an organised grouping of employees which has as its principal purpose the carrying out of activities on behalf of the client.

Drivers 20 of the 45 drivers work on the M Plc contract. They are required to wear a uniform and have sufficient knowledge about M Plc's vehicles in order that they are able to show M Plc's vehicles to the prospective clients. In this case, Car moves Ltd are likely to be able to show that the 20 drivers who work on the M Plc contract are an organised grouping whose principal purpose is carrying out driving activities for M Plc due to the fact that these drivers have been deliberately organised by reference to the needs of M Plc. Case Study 2 1. The first point that you will need to consider is whether the activities that are being carried out by the current contractor are the same or different from the activities that you are being asked to tender for. If the activities are substantially different then it is unlikely that there will be a service provision change. 2. If the client states that the activities put out to tender are substantially different to those being supplied by its existing contractor you should try to establish exactly what the differences are. In the event that there are some differences in the activities but in reality the activities are "essentially the same" then there will be a service provision change. 3. Assuming that the activities are not substantially different, you will need to find out: How the activities are organised? Unless the employees who carry out the activities are deliberately organised to carry out their work by reference to the needs of the client then there is unlikely to be a service provision change as there will be no "organised grouping". If there is a team of employees who are organised to carry out work for the client then there is likely to be an organised grouping. If there is an organised grouping, is the principal purpose of that group carrying out activities for the client? For example, if there is a group of employee referred to as the "warehouse team" and that group carries out warehouse activities for a range of clients, it will be difficult for the outgoing contractor to show that the group's principal purpose is working on activities to for the client. If there is an organised group of employee whose principal purpose if carrying out activities for the client, are all employees assigned to the group? You will need to consider how much time each of the employee actually spends working on activities for the client 4. In this scenario, the questions set out in part 3 above should be repeated. Unless the outgoing contractor can show that: a) there was an organised group of employees situated in Great Britain which has as its principal purpose the carrying out of activities on behalf of the group; and b) the 25 warehouse operatives, 15 drivers and a transport manager are assigned to that group It will be possible for you to argue that there was no service provision change and that the employees referred to above will not transfer. Effective Solutions for Businesses

Meet the Team Biographies Heather Cowley Partner & Head of Employment Department Heather was a founder partner of Myers Cowley and was previously with Fennemores Solicitors in Milton Keynes. Heather joined Taylor Walton in November 2001. She is accredited in the Legal 500 as a specialist in the field of employment law and now advises the firm s major commercial clients on employment issues. Email: heather.cowley@taylorwalton.co.uk Tel: 01582 390421 Alec Colson Partner Before joining Taylor Walton in April 2007 Alec worked at Irwin Mitchell Solicitors in London as an employment lawyer with particular interest in discrimination law. Before qualifying as a solicitor he was an employment adviser and a regional manager with the British Medical Association and head of its Advocacy Unit. Email: alec.colson@taylorwalton.co.uk Tel: 01582 390470 Debra Wetters Solicitor Debra qualified as an employment lawyer with a leading City firm and prior to joining Taylor Walton in 2012 was practicing in Oxfordshire. Debra advises on the full range of employment law issues, employment tribunal proceedings and employment and pensions aspects of commercial transactions such as share sales and business transfers. She is a member of the Immigration Law Practitioners Association and a specialist in corporate immigration matters. Email: debra.wetters@taylorwalton.co.uk Tel: 01582 390431 Nicola Smyrl Solicitor Nicola joined Taylor Walton as a trainee solicitor in 2007 and qualified into the Employment Department in September 2009. Nicola advises both employers and employees on a wide range of employment related issues including disciplinary, grievances, workplace polices and procedures and redundancy programmes. She also acts for both individuals and commercial clients in employment tribunal claims. Email: nicola.smyrl@taylorwalton.co.uk Tel: 01582 390424 Mehwish Khan Solicitor Mehwish joined Taylor Walton as a trainee solicitor in 2008 and qualified as a solicitor in 2010. Mehwish advises both employers and employees on employment related matters including unfair dismissal, discrimination, redundancy, grievance and disciplinary matters as well as advising on workplace policies and procedures. Email: mehwish.khan@taylorwalton.co.uk Tel: 01582 390522

Taylor Walton Services Services for Business Our corporate law experts advise both UK and international businesses. Specialist areas include corporate acquisitions and financing, business contracts, commercial property, employment law and commercial dispute resolution. Corporate & Commercial Email: jeremy.brockis@taylorwalton.co.uk Tel: 01582 390420 Commercial Real Estate Email: angela.thomas@taylorwalton.co.uk Tel: 01582 731161 Commercial Litigation & Dispute Resolution Employment Email: andrew.knight@taylorwalton.co.uk Tel: 01582 390419 Email: heather.cowley@taylorwalton.co.uk Tel: 01582 390421 Services for Individuals We provide specialist and cost effective advice on conveyancing, family law, wills, probate & tax saving strategies. Our experienced lawyers listen carefully, explain the law clearly and provide you with the confidence to fulfil your objectives. Conveyancing & Relocation Email: trevor.shillabeer@taylorwalton.co.uk Tel: 01582 765111 Wills, Probate and Tax Saving Strategies Family Law Email: richard.crocker@taylorwalton.co.uk Tel: 01582 765111 Email: aileen.hartnett@taylorwalton.co.uk Tel: 01582 765111 Offices in Luton, Harpenden and St Albans. www.taylorwalton.co.uk