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TUPE and service provision changes: Welcome guidance from EAT

02 July 2009

The Employment Appeal Tribunal (EAT) has given some welcome guidance on the correct approach for deciding whether or not a service provision change is covered by TUPE 2006.

Since 2006 the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) have expressly applied to service provision changes (SPC) as well as transfers of businesses. Broadly, under TUPE an SPC is an outsourcing, in-sourcing or change of contractor.

As a new statutory concept previous case law is not applicable to SPC and there have been few cases in this area.

The EAT held that a ‘...commonsense and pragmatic approach is required...'
The important question for a tribunal is ‘...whether the activities carried on by the alleged transferee are fundamentally or essentially the same as those carried out by the alleged transferor...' but, there is ‘...no call for a formal list of factors which the Tribunal must consider before it can make a decision...'

Comment

While any guidance in this area is welcome, the EAT's decision suggests that it will very much be for tribunals to decide each case on its own facts, so it will be hard to devise any universal rules.

The EAT in this case went on to suggest that even if ‘... one contractor ceases and another commences service provision with differences in time, manner and/or place, there can still be an SPC under TUPE'. The safest approach may therefore be, if in doubt, assume TUPE applies.

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