SUMMARY
TRANSFER OF UNDERTAKINGS – Service provision change
The Employment Tribunal was entitled to find that there was no
TUPE transfer (whether a transfer of undertaking or a service provision change)
where residents of a care home operated by an NHS Trust were rehoused in
individual homes; and the Claimant care workers, formerly employed by the NHS
Trust at the care home, were then offered employment by the Second or Third Respondents,
in most cases to sleep in at the service users’ homes. The economic entity did
not retain its identity, and the services provided were not fundamentally or
essentially the same after the change as they had been before.
THE HONOURABLE MR JUSTICE BEAN
1.
This is an appeal by Nottinghamshire Healthcare NHS Trust from a
decision of Employment Judge Morgan sitting alone in the Employment Tribunal at
Sheffield. The twelve individual Claimants before the Tribunal had been
employed by the Trust at Hillside House, a care home for adults with learning
disabilities, which was closed on 31 March 2010. The residents were re-housed
into homes of their own. Their care was to be transferred to Perthyn or to
Choice Support, each being firms specialising in care provision. The Claimants
were informed by the Trust that this constituted a relevant transfer within TUPE
and that their employment was to continue with Perthyn in the case of Mr
Hamshaw and Ms Beaumont and Choice Support in the case of the other Claimants.
The Trust ceased to pay them with effect from 1 April 2010.
2.
The Claimants brought claims before the Tribunal for unfair dismissal,
pay in lieu of notice, outstanding holiday pay and a contractual redundancy
payment. UNISON, of which they were members, also sought a protective award for
failure to consult about the proposed transfer. The Employment Judge held a
pre-hearing review to decide the TUPE issue and upheld the Claimants’ and the Second
Respondents’ argument that there had been no relevant transfer. The claims
against the Second and Third Respondents were accordingly dismissed. The Trust
appeals. The Claimants and Second and Third Respondents resist the appeal.
The material facts found by the Tribunal
3.
Hillside House was a residential facility in Bassetlaw for adults
requiring long-term welfare and medical support. The service users were
vulnerable adults requiring varying degrees of support and supervision. They
resided full-time at Hillside House. All staff permanently employed there were
in the direct employment of the Trust. Residents were assisted by staff in
making their own beds. Cleaning and catering duties were undertaken by
others. There was no opportunity for residents to develop cooking skills.
4.
In 2008 the Trust entered into discussion and negotiation with the County
Council and other statutory agencies in connection with continuing care
provision for the residents. A scheme described as a “multi-agency commission
led service model” was devised which involved what the Employment Judge found
to be “fundamental changes” from the regime operated at Hillside House, namely
(a) the removal of each resident from an institutional setting to his or her
own home pursuant to a tenancy agreement with a local housing association; (b)
the structuring of personally focussed care plans aimed at both challenging and
developing the capabilities and potential of the individual whilst ensuring the
provision of a safe environment within which existing skills might be enhanced;
and (c) the discharge of the former resident from the care of the Trust.
5.
By late 2008 Hillside House had seven residents supported by healthcare
assistants, who in turn were managed and supervised by qualified nursing
staff. Residents were monitored and managed on a 24 hour basis with active
night staff. Within the limitations of that setting, however, a range of steps
had been taken to build upon the client’s own sense of autonomy. Each of the
seven residents had a particular healthcare assistant nominated as key worker.
The key worker nomination did not preclude the nominated care assistant from
carrying out activities or otherwise participating in the care of other
residents.
6.
Apart from the obvious difference between a care home and an individual
flat, there would be a difference in staff duties. At Hillside House, staff
had worked active night shifts (that is to say they were awake on duty). In
contrast, in the case of some at least of the former residents, once
transferred to their own accommodation, the nominated member of staff would
sleep in the same accommodation provided for and occupied by the resident. The
Employment Judge continued:
“With
effect from 1st April 2010 a number of important changes occurred in
the daily routines of the clients themselves. These included an expectation
that each [would] develop a greater independence in the cleaning, care and
management of their own homes, a task in which they were to be assisted by care
workers. There was equally an expectation that clients would routinely
undertake domestic tasks such as shopping, food preparation and cooking. In
the view of the Tribunal, these were important changes which marked the
commencement of a new phase of residential care and support. The clients were
also encouraged to acquire confidence in handling their own money and
possessions. Further, and in contrast to the position at Hillside House, the
client would have the benefit of a care worker who would be on hand to assist
when required, through the sleep-in arrangements.
In
the view of the Tribunal the changes which took effect on 1st April
2010 were not merely geographical, but represented a material shift in the
ethos of the service and the manner of its provision… While the tribunal
accepts that there remained an obligation on those undertaking day to day
provision of the care to call upon the services of medically qualified
personnel where necessary, the Tribunal is satisfied that post 1st
April 2010 the emphasis was one of supporting living and welfare…
Prior
to 1st April 2010 Hillside House was a constituent part of the first
respondent trust, located upon one of its hospital campuses. The unit enjoyed
dedicated personnel qualified and non-qualified. However, it also drew upon a
number of other resources in the delivery of its service. These included (1)
the fabric of the building itself and the accommodation it comprised; (2) the
benefit – whether directly or indirectly – of NHS funding; (3) the shared use
of cleaning, catering and maintenance services and personnel drawn from the
same hospital campus; and (4) the clients.
As
to the destination of those resources after 1st April 2010 it was
common ground between the parties that the property of Hillside House was not
the subject of transfer, lease or licence to any third party for the purpose of
benefit of the clients. The Tribunal is equally satisfied that the necessary
funding for the Hillside House facility ceased to be available to the [Trust];
however, it would be entirely artificial to suggest the funding for social
services enjoyed a direct correspondence to the former NHS resource. It is
nonetheless clear that whilst qualified staff were found alternative posts
within the respondent Trust, a small minority of the healthcare assistants were
intended to continue in post, providing services for the clients under the aegis
of the second and/or third respondent. In the case of the second respondent,
such proposed arrangements extended to only three of the 18 employees formerly
based at Hillside House. The other resources and personnel were not intended
to be deployed to either the second or third respondent. As for the clients,
only two of the seven resident clients were allocated to the second
respondent. Similar observations apply to the third respondent.”
7.
Mr Damian Brown for the Trust criticises the inaccuracy or at least
inadequacy of the factual findings in the last four sentences. One is a small
matter: it appears that three (not two) of the seven residents were allocated
to Perthyn and four (not five) to Choice Support. It is not suggested by anyone
that this is significant. But it is also common ground that, while three of
the eighteen employees went to Perthyn, twelve of the eighteen went to Choice
Support. Mr Brown submits that the failure to note this is significant. I
will return to this point later.
The TUPE Regulations
8.
Regulation 3 of the Transfer of Undertakings (Protection of Employment)
Regulations 2006 provides, so far as material:
“(1) These
Regulations apply to—
(a) a transfer
of an undertaking, business or part of an undertaking or business situated
immediately before the transfer in the United Kingdom to another person where
there is a transfer of an economic entity which retains its identity;
(b) a service provision change, that is a
situation in which—
(i)
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”);
(ii)
activities cease to be carried out by a
contractor on a client’s behalf (whether or not those activities had previously
been carried out by the client on his own behalf) and are carried out instead
by another person (“a subsequent contractor”) on the client’s behalf; or
(iii)
activities cease to be carried out by a
contractor or a subsequent contractor on a client’s behalf (whether or not
those activities had previously been carried out by the client on his own
behalf) and are carried out instead by the client on his own behalf,
and in which the conditions set out
in paragraph (3) are satisfied.
(2) In this regulation “economic entity” means an
organised grouping of resources which has the objective of pursuing an economic
activity, whether or not that activity is central or ancillary.
(3) The conditions referred to in paragraph (1)(b)
are that—
(a) immediately before the service provision
change—
(i)
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;
(ii)
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;
and
(b)
the activities concerned do not consist
wholly or mainly of the supply of goods for the client’s use.”
(4) Subject to paragraph (1) these regulations
apply to-
(a) public and private undertakings engaged in economic
activities whether or not they are operating for gain;
(b) a transfer or service provision
change howsoever effected…
(6) A relevant transfer-
(i) may be effected by a series of two or more transactions:
and
(ii) may take place whether not any property is
transferred to the transferee by the transferor.”
9.
There are therefore two types of relevant transfer; a transfer of an
undertaking (or part of an undertaking) and a service provision change.
Transfer of an Undertaking
10.
Regulation 3(1)(a), which deals with what may be described as the
traditional type of transfer, derives from the EC Acquired Rights Directive and
was formerly set out (in not quite identical terms) in the 1981 Regulations.
The text was designed to spell out the tests derived from the Luxembourg caselaw, notably Spijkers [1986] 2 CMLR 296. There must be an
economic entity which retains its identity after the transfer. The factors to
be taken into account are conveniently summarised in the EAT’s judgment
delivered by the then President, Lindsay J, in Cheesman v Brewer Contracts
Ltd [2001] IRLR 144.
11.
It was contended for the Trust before the Tribunal that the economic
entity formerly comprised in Hillside House, although “fragmented”
post-transfer, had nevertheless retained its identity. Mr Brewer, the solicitor
for the Trust who argued its case below, contended that the economic entity
retained its identity by dint of the fact that each former resident continued
to receive supported living and welfare services through the local authority.
12.
The Employment Judge held:
“14.Whilst
superficially attractive, the Tribunal has come to the conclusion this argument
faces a number of insurmountable difficulties, both legal and factual. As a
matter of principle, Fairhurst Ward Abbotts is nothing more than
confirmation of the proposition that the division of a composite whole into
smaller parts will not preclude the finding of a relevant transfer. Put
simply, to conclude otherwise would defeat the language of the Directive and
the Regulations, which specifically address part disposals. It is nonetheless
clear, whether the target of the putative transfer is the whole of the former
economic entity or a constituent part, it must retain its identity, if a
relevant transfer is to have occurred. Mr Brewer placed additional reliance
upon a number of other cases, including Kenny v South Manchester College. However, in each of the cases
referred to, the service of undertaking activity was for practical purposes the
same – subject to minor modification – before and after the putative transfer,
with the most significant alteration being one of venue or the identity of a service
provider.
15.
The Tribunal has borne in mind a transfer may be achieved by a number of
sequence of transactions, and further, a mere change in the manner in which
services are delivered does not preclude a determination that there has been a
relevant transfer. However, even accommodating those principles, the rationale
adopted in the cases cited by Mr Brewer remain far removed from the facts of
this case.
16.
In the view of the Tribunal there is realistically no scope for the suggestion
the economic entity of Hillside House retained its identity after 1 April
2010. On the contrary, the unit known as Hillside House was closed, and the
clients formerly resident there took up residence in their own properties, away
from facilities managed under the aegis of the first respondent. Indeed, one
might have thought one of the principal means by which the aspirations of the
framework agreement and individual contracts entered into in respect of the
clients was to be realised, was to ensure there was no visible management of
these clients, rather, that they should be seen to be supported in their own
homes as with other members of the community drawing upon such services from
time to time.
17/.
Whilst it may be accurate to say the beneficiaries of the services to be
provided remained the same, the service was no longer a part of the NHS and was
fundamentally different from that operated prior to 1 April 2010. Drawing upon
the vocabulary of the past, these clients were being moved from ‘Institution’
to home; from ‘management’ to support. For all these reasons, the Tribunal is
satisfied the reliance placed upon arguments of fragmentation do not assist the
first respondent; but rather, represent an over-simplification which is
unsupported by the facts of this case.
18.
In the circumstances, the Tribunal is satisfied there was no relevant transfer
for the purposes of regulation 3(1)(a) of TUPE.”
13.
It is common ground that, as both the domestic and the European case law
demonstrate, the determination of whether a relevant transfer has occurred is a
highly fact-sensitive judgment. Mr Brown nevertheless submits that these
findings are flawed.
14.
Firstly, he makes the point cited above, that the judge failed to
consider the fact that twelve of the relevant eighteen employees had
transferred to Choice Support as well as three to Perthyn. This is a valid
criticism, but in my judgment it is not significant in the overall picture.
15.
Mr Brown’s next argument is that the findings of fact concentrate on the
difference between the old and new arrangements rather than on the similarities
between them. This is not, in my judgment, a valid criticism. The similarities
between the old and new arrangements were obvious. The Claimants had been
looking after the residents in Hillside House and they were still looking after
them in their new homes. The Employment Judge was well aware of this. But it
is legitimate, in considering an argument that an economic entity has retained
its identity, to focus on the differences and see what they add up to. That is
what the judge did in the present case.
16.
Mr Brown submits that the judge confused the premises, which were
obviously not transferred, with what he described as “the organised grouping of
wage earners specifically assigned to the common task of caring for residents
which itself amounted to an economic entity”. But regulation 3(2) does not
refer to an “organised grouping of employees”: that is a phrase from regulation
3(3)(a)(i), which relates to service provision changes. Regulation 3(2)
defines “economic entity” as “an organised grouping of resources which
has the objective of pursuing an economic activity, whether or not that
activity is central or ancillary” [emphasis added]. It is true that in Cheesman
v Brewer at paragraph 10(iv) the EAT observed that “an organised
grouping of wage earners who are specifically and permanently assigned to a
common task may in the absence of other factors of production amount to an
economic entity.” But that was not the position here: there were other factors
of production besides the Claimants and their colleagues.
17.
The EAT in Cheesman continued:
“An activity of itself is not an entity. The identity
of an economic entity emerges from other factors such as its workforce, its
management and staff, the way in which its work is organised, its operating
methods and, where appropriate, the operational resources available to it.”
Describing the economic entity as “Hillside House” is
convenient shorthand for the entity of Hillside House, its premises, staff
(nurses, care assistants and any ancillary staff), residents, equipment, resources
and organisation. The care assistants and residents transferred but the
premises, equipment, resources and organisation did not.
18.
Mr Brown submitted that in defining the economic entity as the whole of
Hillside House the judge failed to “apply the Fairhurst test”.
In Fairhurst, Ward, Abbotts Ltd v Botes Building Ltd [2004] IRLR 304 the respondents had provided Southwark Council with building
maintenance services for the whole borough for three years. When the council
invited new tenders it split the borough in two and invited tenders for each
area separately. One of these was won by Fairhurst. The Employment Tribunal
found that there had been a transfer of part of an undertaking. The decision
was affirmed on appeal. The EAT held that there is no requirement that a part
of an undertaking transferred is itself a separate economic entity before the
transfer. In the present case it was common ground that the division of
residents and care workers after the transfer between Choice Support and
Perthyn makes no difference. Even if all the residents and all the Claimants
had gone to Choice Support the Tribunal’s finding that the economic entity did
not retain its identity would in my view be clearly justified.
19.
The Tribunal did not, as Mr Brown submits, fall into the error of
confusing the mode of providing the services with the activity or service
itself. In support of this argument Mr Brown cited Porter v Queens Medical Centre [1993] IRLR 486 in which the deputy judge, Sir Godfray
Le Quesne QC, observed:
“One factor which is always to be taken into account is
the type of undertaking in question. Here it is an undertaking for the
provision of medical services. Medical science does not stand still, as it
advances methods of giving… care are naturally modified and improved… It does
not mean that the object of the undertaking is changing but only that new means
of achieving it are being adopted… We are therefore dealing with a type of
undertaking in which it is particularly likely that different ways of carrying
on the undertaking may be adopted without destroying its identity. In my
judgment the undertaking of providing neo-natal and paediatric care has retained
its identity through the change of provider and there has been a transfer of
the undertaking.”
20.
Of course medical science does not stand still, and new methods of
caring for the sick or for people with disabilities are constantly devised. As
the Employment Judge observed in the present case, a mere change in the manner
in which services are delivered does not preclude a determination that there
has been a relevant transfer. But I do not consider that Porter,
is, or could be, authority for the proposition that if the object of the
undertaking (in this case the provision of care and support for vulnerable
adults) remains the same, that is a decisive or crucial pointer towards a
transfer.
21.
It is not in the least surprising that in Porter there was
found to be a relevant transfer. In paragraphs 42 and 43 of his judgment Sir
Godfray said:
“The
services are to be provided for the same population under the new contract as
under the old. The buildings and the installations of the Grantham and
Kesteven hospital were used under the old contract and are used under the new.
At least 16 nurses and three doctors who were providing services by the old
contract have been taken on by the Defendants to provide services under the
new. Only four people – the two plaintiffs and two nurses – have not been
taken on. The old contract and the new each contain a service specification.
The aim and object stated in the two specifications are closely similar…
Indeed, the similarity between the old contract and the new goes beyond aims
and objectives; it extends to provision for liaison with community units and
general practitioners, access to other specialist providers, family centred
care, day care rather than admission to hospital, overnight accommodation for
parents and a number of other matters.”
In short, both the old and the new systems for the
provision of neo-natal and paediatric services in the district were very
similar indeed, and were based in the same premises. Porter is
far removed from the present case.
22.
Mr Brown submitted that the service users, with their care records and
care plans, all of which transferred, formed a significant part of the goodwill
of the business. (“Goodwill” is an odd term to use in this context. Perhaps
“assets” would be a reasonable substitute.) I do not regard the care records
and care plans as significant assets. In a sense the residents were
significant assets but so were the beds, furniture and equipment at Hillside
House, so were the nursing staff, who did not transfer. And so were, of
course, the premises themselves.
23.
Finally on this topic, Mr Brown says that the judge failed to take the
expressed intentions of the parties into account. Mr Brown accepts, correctly,
that the paperwork cannot be decisive. The Employment Judge had it well in
mind. He applied the law correctly and made findings of fact which were open
to him. The one possible error of fact was not material. He was entitled to
find that the service after transfer was “fundamentally different” from that
which had operated at Hillside House and that there was therefore no relevant
transfer.
Service provision change
24.
Regulation 3(1)(b) provides for three types of service provision change;
outsourcing (subparagraph (1)); insourcing, or bringing services back in house
(subparagraph (3)); and the one relevant to the present case, the change from
one contractor to another. By the terms of regulation 2 “contractor” includes
subcontractor.
25.
It is important first to ask, who is the “client”? Before the Employment
Judge Mr Brewer had contended that the residents were the clients. This cannot
be correct, because in subparagraphs (1) and (3) the “client” is the person who
is carrying out the activities before or after the transfer as the case may be
and on whose behalf (not “for whose benefit”) the activities are carried out.
Moreover, in all three subparagraphs of regulation 3(1)(b) the “client” is the
person who makes the decision about transfer, since by regulation (3)(3)(b) it
is necessary for a service change provision that the client must intend that
the activities, following the change, will be carried out by the transferee.
Mr Brown did not pursue before me the argument that the residents were the
“clients”. Rather, he submitted, the Secretary of State for Health was the
client; and the subcontractor carrying out the relevant activity was the Trust before
the transfer and Perthyn or Choice Support after the transfer.
26.
Mr Oliver Segal QC, for the Claimants, responds with the following
analysis. Before 1 April 2010 the Trust was carrying on the activities on
behalf of, and under contract with Bassetlaw Primary Care Trust, which in turn
received funding from the Secretary of State for their support. After 1 April
2010 the PCT continued to be responsible for medical care (so that if one of
the former residents falls ill at home, a general practitioner must be called),
but Nottinghamshire County Council took over responsibility for welfare
support. The services provided by the Claimants fall under the latter category.
So, Mr Segal submits, on 1 April 2010 the “client” changed from the PCT to the
county council at the same time as the contractor changed from the NHS Trust to
Choice Support or Perthyn. Since both the client and the contractor changed
simultaneously, regulation 3(1)(b) cannot apply.
27.
It is unnecessary to resolve this interesting issue since, even if Mr
Brown is right about it, this appeal cannot succeed.
28.
There have been two decisions of the EAT on regulation 3(1)(b). Kimberley
Group Housing Ltd v Hambley [2008] ICR 1030 was a case
where the relevant activities were agreed to be “the provision of suitable
accommodation and related support services to asylum seekers in Middlesbrough
and separately in Stockton”. The outgoing provider had run 140 properties in
Middlesbrough and 50 in Stockton.” Two different companies took over the
activities. The EAT upheld a finding by the Employment Tribunal of a service
provision change, contrasting the case with “circumstances in which a service,
which is being provided by one contractor to a client, is in the event so
fragmented that nothing which one can properly determine as being a service
provision change has taken place.”
29.
Metropolitan Resources Ltd v Churchill Dulwich Ltd [2009] IRLR 700 also concerned accommodation for asylum seekers. The Home Office had
a contract with the charity Migrant Helpline Ltd to provide such
accommodation. Migrant Helpline in turn had a series of six month contracts
with Churchill Dulwich Ltd, who operated a hostel called Barry House where the
claimants were employed. Churchill Dulwich lost the relevant contract, which
was won by Metropolitan Resources, who operated a hostel called Coombe Farm.
New asylum seekers arriving after a particular date, instead of being sent to
Barry House, were diverted to Coombe Farm. Churchill Dulwich later became
insolvent. Again, the EAT upheld the Tribunal’s finding of a service provision
change. Judge Burke QC noted that regulation 3(1)(b), unlike regulation
3(1)(a), does not derive from the Acquired Rights Directive but from section 38
of the Employment Rights Act 1999. He said:
“26 ….Having
reconsidered [the documents laid before Parliament at the time of the approval
of the 2006 Regulations], I regard them as doing no more than confirming what I
would have concluded from the legislative history and my knowledge of the
practical difficulties thrown up by the original Regulations and by judicial
decisions, both domestic and European, upon those Regulations and upon the Acquired
Rights Directive which those Regulations were intended to put into effect in
the domestic context; and that is that the introduction in TUPE 2006 of the
concept of a transfer of undertakings by a service provision change was
intended to remove or at least alleviate the uncertainties and difficulties
created, in a variety of familiar commercial settings, by the need under TUPE
1981 to establish a transfer of a stable economic entity which retained its
identity in the hands of the alleged transferee, particularly in the case of
labour-intensive operations, by including within the definition of a transfer
of undertaking the situations falling within Regulation 3(1)(b) in which the
conditions set out in Regulation 3(3) were satisfied. The three situations
falling within Regulation 3(1)(b) can shortly be described as outsourcing
(Regulation 3(1)(b)(i)), in-sourcing (Regulation 3(1)(b)(iii)), and a change in
the provision of activities or services carried out on behalf of a client
between one contractor and another (Regulation 3(1)(b)(ii)). All these
situations are well-known to employment lawyers to have caused problems under TUPE
1981. The introduction of Regulation 3(1)(b) enables a transfer to be
established in any of those three situations if the activities previously carried
out by client or contractor have ceased to be so carried out and, instead, are
carried out by a contractor or a new contractor or by the client.
27. "Service provision change" is a wholly new
statutory concept. It is not defined in terms of economic entity nor of other
concepts which have developed under TUPE 1981 or by Community decisions on the Acquired
Rights Directive prior to April 2006 when the new Regulations took effect. The
circumstances in which a service provision change is established are, in my
judgment, comprehensively and clearly set out in Regulation 3(1)(b) itself and
Regulation 3(3); if there was, immediately before the change relied upon, an
organised grouping of employees which had as its principal purpose the carrying
out of the activities in question, the client intends that those activities
will be carried out by the alleged transferee, other than in connection with a
single specific event or a task of short term duration, and the activities do
not consist totally or mainly of the supply of goods for the client's use, and
if those activities cease to be carried out by the alleged transferor and are
carried out instead by the alleged transferee, a relevant transfer exists. In
contrast to the words used to define transfer in TUPE 1981 the new provisions
appear to be straightforward; and their application to an individual case is,
in my judgment, essentially one of fact.
28. In this context there is, as I see it, no need for an
Employment Tribunal to adopt a purposive construction as suggested by Mr
Cooper, as opposed to a straightforward and commonsense application of the
relevant statutory words to the individual circumstances before them; but
equally and for the same reasons there is no need for a judicially prescribed
multi-factorial approach, as advanced by Mr Bourne, such as that which has
necessarily arisen in order to enable the Tribunal to adjudge whether there was
a stable economic entity which retained its identity after what was said to be
a transfer falling within what is now Regulation 3(1)(a).
29. In a case in which Regulation 3(1)(b) is relied upon,
the Employment Tribunal should ask itself simply whether, on the facts, one of
the three situations set out in Regulation 3(1)(b) existed and whether the
conditions set out in Regulation 3(3) are satisfied.
30. The statutory words require the Employment Tribunal to
concentrate upon the relevant activities; and tribunals will inevitably be
faced, as in this case, with arguments that the activities carried on by the
alleged transferee are not identical to the activities carried on by the
alleged transferor because there are detailed differences between what the
former does and what the latter did or in the manner in which the former
performs and the latter performed the relevant tasks. However it cannot, in my
judgment, have been the intention of the introduction of the new concept of
service provision change that that concept should not apply because of some
minor difference or differences between the nature of the tasks carried on
after what is said to have been a service provision change as compared with
before it or in the way in which they are performed as compared with the nature
or mode of performance of those tasks in the hands of the alleged transferor. A
commonsense and pragmatic approach is required to enable a case in which
problems of this nature arise to be appropriately decided, as was adopted by
the Tribunal in the present case. The Tribunal needs to ask itself whether the
activities carried on by the alleged transferee are fundamentally or
essentially the same as those carried out by the alleged transferor. The answer
to that question will be one of fact and degree, to be assessed by the Tribunal
on the evidence in the individual case before it. ………..
37…… As an example, a
difference in the location from which the transferee performs the relevant activities
instead of the transferor is highly unlikely, of its own, to be determinative
against the existence of a service provision change. It is likely that a
situation in which a replacement service provider carries out an activity
instead of a predecessor but from a different location will frequently arise -
as, for example, in the case of building maintenance contracts which have
historically been an area in which the existence of a TUPE transfer has had to
be considered. Equally, as it seems to me, the addition, in the hands of a
replacement contractor, who is performing all of the services carried out by
his predecessor, of some additional duty or function is unlikely, unless the addition
is of such substance that the activity then being carried on is no longer
essentially the same as that carried on by the predecessor, to negate the
existence of a transfer under Regulation 3(1)(b). It is for the Tribunal in
each case to assess, on the facts, taking into account any material
differences, whether the alleged transferee is performing essentially the same
activity as that of the alleged transferor. The Tribunal carried out that task
in this case and came to a conclusion which was permissible and could not be
said to have been perverse.”
30.
This is a characteristically clear and careful analysis by a judge with
almost unrivalled experience of employment law. Mr Brown did not contend that
it was wrong, and for my part I agree with it entirely. Here the activities
carried on by Perthyn and Choice Support were not “fundamentally or essentially
the same” as those carried on by the Trust at Hillside House before the transfer.
On the contrary, as Employment Judge Morgan found, the services provided were
materially different.
Conclusion
31.
It follows that both on the transfer of undertaking issue and the
service provision change issue the Employment Tribunal’s judgment was in my
view correct and the Trust’s appeal must be dismissed.
