05 June 2015
In Jinks v London Borough of Havering the Employment Appeal Tribunal had to consider the interpretation of the word “client” in a service provision change case in terms of the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).
London Borough of Havering (the Council) contracted with a third party to operate an ice rink and car park. That third party then sub-contracted the running of the car park to another company whose sub contract ended when the Council transferred the car park to a local NHS Trust. The question was whether there was a TUPE transfer to the Council (such that the staff who carried out the activities transferred to the Council’s employment).
The Employment Tribunal adopted a strict interpretation of TUPE holding that the client must be the same both before and after the transfer. As there was no contractual relationship between the Council and the company running the car park, the activities could not be “carried on behalf of the client”. The case was therefore struck out, the Tribunal finding that there could be no service provision change (and so TUPE did not apply).
The Employment Appeal Tribunal disagreed with the Tribunal and adopted a wider interpretation of “client” and found that the question that should be asked is this: on whose behalf was the car park being run? The identification of the “client” is a question of fact, not law, and the Employment Appeal Tribunal reasoned that there can be more than one client in any given case. A strict legal or contractual relationship was not essential. The case was sent back to the Employment Tribunal to re-consider given the interpretation to be applied.
This case emphasises the need for care when activities change hands. Early specialist employment law advice is crucial to ensure all issues are considered and risks minimised. Regrettably TUPE is a complex area of law and often it can be difficult to determine whether there will be a relevant transfer or not. Furthermore it may be possible to structure transfers in ways to minimise risk. If TUPE applies, there can be significant information and consultation obligations (together with significant restrictions on changes to terms and conditions and dismissals). If in doubt, give the team a call.
To discuss further please contact one of our BTO employment lawyers on 0141 221 8012.
Link to Jinks v London Borough of Havering Employment Appeal Tribunal: http://www.bailii.org/uk/cases/UKEAT/2015/0157_14_2302.html