TUPE – Service Provision Changes And Dedicated Staff

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), which implement the EC Acquired Rights Directive in the UK, reformed the existing law relating to the employment rights of employees when their employer changes as a result of the relevant transfer of a business or a part of one.

The new TUPE legislation widened the scope of what counts as a relevant transfer so that it now covers situations where services are contracted out, contracted in or where a contract is assigned to a new contractor on subsequent re-tendering. These are described as ‘service provision changes’. The Regulations do not apply, however, where the service provision is a single specific event or task of short-term duration.

In Royden v Barnetts Solicitors, the Liverpool Employment Tribunal (ET) held that, following a successful bid by Barnetts to take on conveyancing work referred by the Britannia Building Society (BBS), two employees of the law firm that had previously handled the work were sufficiently involved with it on a day-to-day basis to be transferred under TUPE to Barnetts. Other employees could not demonstrate that they had handled a sufficient amount of the client’s work for the service provision changes of TUPE to apply in their cases.

The employees were offered work in Bradford, Manchester or Southport. Southport was the only location they were willing to consider, but it was clear that they were reluctant to work there and they resigned on the ground that there had been a transfer of the undertaking in which they worked and the direction that they should work in Southport was a breach of their contracts. They also made claims against Barnetts of unfair dismissal and a failure to consult affected employees as required under TUPE.

The ET found that Barnetts had failed to comply with the duty to consult affected employees. In addition, given the location of the employees’ homes, the transfer would involve a substantial change in their working conditions, to their material detriment, and they were therefore entitled to resign and claim unfair dismissal.

Whilst, when there is a transfer to which TUPE applies, a finding of unfair dismissal can be avoided if there is an economic, technical or organisational reason for changes in the workforce, this could not be argued as the direction that the employees work in Southport was not made in order to bring about a reduction in manpower.

Says Emmanuelle Ries, “Failure to comply with the TUPE provisions can prove costly. If you are considering tendering for work that is currently carried out by an organised grouping of employees dedicated to that work, it is important to take advice at the beginning of the process, so that your decision is made bearing in mind all the legal implications.”

The material contained in this article is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.

© , July 2009

Please contact:

Emmanuelle Ries

DD +44 (0)20 7553 9938

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