04 December 2015 #Employment
If a client decides to outsource certain services for the first time, reassign those services to another contractor or bring those services back “in-house,” there may be a service provision change under TUPE. If however the activities performed relate to a one off event or task of short-term duration, TUPE will not apply.
Further guidance on “tasks of short-term duration” was provided in the recent case of ICTS UK Ltd v Mahdi and others UKEAT/0133/15. In that case a new owner of a university campus contracted with a security provider, First Call Secure Group Ltd “First Call” to replace security services which had previously been carried out by ICTS UK Ltd. The contract was purportedly to provide security services on an interim basis until a major redevelopment of the campus was complete. First Call insisted that TUPE did not apply and refused to take on any of ICTS’ staff by relying on the “short-term duration” exemption. First Call argued that it had contracted to secure what was intended to become a building site, pending completion of the redevelopment. The Employment Tribunal agreed that the activities were of “short-term duration” and accordingly, TUPE did not apply.
On appeal, the Employment Appeal Tribunal held that the employment judge had erred by ignoring the events which took place after First Call secured the contract. The employment judge did not pay any regard to the fact that no planning permission had been granted for the redevelopment of the site and no building work had taken place. The case was remitted back to the tribunal. The EAT reiterated that although it is important to consider the client’s intention at the time of the transfer, subsequent events post-transfer may also be taken into account. In this case, the subsequent events (the fact that no building works had taken place) casted doubt on whether the client genuinely intended the services to be of short- term duration.
This case acts as a useful reminder to both clients and incoming contractors who may attempt to structure a contract in a way to try and rely on an exemption under TUPE. Tribunals will look beyond what the contract and parties say and consider what is happening on the ground to decide whether TUPE applies.