TUPE: Are the Activities Fundamentally the Same?
17th January, 2017
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) applies if there is a ‘relevant transfer’ or where there is a ‘service provision change’.
A service provision change can include where activities are no longer carried out by a contractor and are carried out by a subsequent contractor instead. When considering this, the key question is whether the activities that were carried out by the first contractor are fundamentally the same as the activities carried out by the subsequent contractor. The activities must be fundamentally the same for TUPE to apply.
The case of Salvation Army Trustee Company v Bahi and others UKEAT/0120/16 recently considered this question.
Coventry City Council (the Council) provided services to homeless people and had contracts with a number of service providers to enable them to do this. One of the service providers was the charity, Coventry Cyrenians Ltd (CCL). They had two contracts with the Council to provide accommodation based support. They provided accommodation for service users over the age of 18. CCL assessed prospective service users and allocated a support worker to assist them while they lived in the accommodation if they were accepted. The support workers were available between 9.00am and 5.00pm and helped with such things as benefits, form filling, addressing issues such as drug and alcohol misuse and help with accessing education/work.
Service users could stay in the accommodation for up to two years but the maximum stay would usually be 12 months. Once the service users had moved, they were provided with ‘floating support’.
The Council decided it wanted to replace its numerous contracts with a single contract. As such, the Salvation Army Trust Company (SAT) entered into a contract with the Council.
SAT provided accommodation to all service users over the age of 25. The service users would be found private accommodation and provided with floating support immediately if appropriate. If not, they would go to an assessment unit and a support care plan would be put in place before they were provided with supported accommodation for up to 112 days. The hostels were staffed overnight and support workers were available between 7.00am and 7.00pm.
CCL and the claimants claimed that there had been a TUPE transfer and the circumstances amount to a service provision change.
At tribunal, the Employment Judge found that the activities before the change in contractor had been the provision of accommodation based support for homeless men and women and the availability of support workers. It was found that this service remained fundamentally the same following the change of service provider and therefore, TUPE applied.
SAT appealed this decision but the appeal was dismissed by the Employment Appeal Tribunal.
If you are unsure whether there is a ‘relevant transfer’ or if there is a service provision change, and, therefore, are unsure whether TUPE applies, contact our Employment department immediately for specialist advice and to avoid potentially breaching the TUPE Regulations and all relevant legislation.