October 31, 2016

TUPE: Service Provision Change

In Salvation Army Trustee Company v Bahi UKEAT/0120/16, the Employment Appeal Tribunal (EAT) considered the correct approach to determining whether activities carried out before and after a service provision change under TUPE were “fundamentally the same”.

Coventry City Council (Council) provided services to the homeless, through a network of providers with which they had separate contracts. Amongst these were contracts between the Council and a charity, Coventry Cyrenians Ltd (CCL), under which CCL provided accommodation-based support for the homeless. The claimants were employed by CCL in connection with these contracts. The Council decided to replace their numerous existing contracts with a single one, which the Salvation Army (SA) was successful in obtaining. The claimants argued that this constituted a service provision change under TUPE (SPC) as a result of which their employment contracts had transferred to SA.

The EAT held that there had been an SPC. The EAT clarified that the word “activities” must be given its ordinary, everyday meaning. Whilst an overly general definition of activities would be misleading, an excessively detailed and narrow definition could also frustrate the purpose of the SPC provisions. Taking this into account, although there were some differences between how the services were provided (e.g., they were run from two hostels rather than 10 houses), the EAT found that the activities before the change of provider to SA (namely to provide support-based accommodation to the homeless to assist in their return to private accommodation) had remained fundamentally the same after the change. 

While this decision does not establish new law, it is a helpful reminder of the law in the context of assessing whether an SPC has occurred.

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