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Activities fundamentally the same despite alterations to location and scope of service

01 March 2017

The Employment Appeal Tribunal (“EAT”) has upheld an employment judge’s decision that a service to provide accommodation-based support services for homeless people had remained fundamentally the same before and after a TUPE service provision change (“SPC”), despite alterations to the location and scope of the service.

Facts of the case

Coventry Cyrenians Ltd (“CCL”) had two contracts with Coventry City Council to provide accommodation support for homeless men and women over the age of 18. It operated ten multiple occupation houses staffed by support workers during office hours, in addition to which there was a 24-hour, on-call facility. Service users were expected to move on to private tenancies within twelve months, but many moved on after six months.

Mrs Bahi and three colleagues were employed by CCL as support workers in connection with the provision of these services.

The Council decided to merge the provision of homelessness and ex-offender support and the Salvation Army (“SA”) was successful in tendering for this contract. The SA operated the service from two large hostels for service users over 25 years old. Support workers attended between 7am and 7pm with a 24-hour concierge service. Supported accommodation was provided for only 112 days.

Mrs Bahi and her colleagues (and CCL) contended that there had been a SPC under TUPE, which meant that their employment would transfer to the SA. The relevant provisions require that the "activities" that are carried out by the new contractor must be “fundamentally the same” as the activities carried out by the previous contractor.

The employment judge hearing the case agreed that there had been a SPC and concluded that the activities of the SA were not fundamentally different from those carried out by CCL before the change of contract. The judge found that the fundamental activities were “the provision of accommodation and the input of a support worker to facilitate the individual returning to mainstream private accommodation” and “to move on the service user to private accommodation as soon as reasonably practicable”.

The EAT’s judgment

The EAT dismissed an appeal by the SA against this finding. It decided that the employment judge had correctly approached the definition of “activities”, which should be given its ordinary everyday meaning (as previously held by the EAT in Arch Initiatives v Greater Manchester West Mental Health NHS Foundation Trust [2016] IRLR 406.

The EAT said that the definition of the activities should not be so general that it does not describe the specific activities at all. For example, it would be incorrect to say that a fully catered canteen was merely the provision of food to staff. On the other hand, the definition should avoid too narrow a focus. As such, the employment judge had not been obliged to define the activities as being long-term or by reference to locations (the Council’s contract permitted the activity to be carried out at different locations).

The EAT concluded by commenting on the importance of a speedy resolution for all parties, particularly noting the difficulties for the employees and the expense incurred. It suggested that some form of “fast-track” employment tribunal procedure would be highly desirable in this type of case.

Implications

This case provides another example of the holistic approach to be taken when assessing activities before a change in service provider in deciding whether requirements for a SPC are satisfied. The EAT’s judgment typifies the broad interpretation the courts tend to favour nowadays when considering the application of TUPE and their reluctance to adopt too technical an approach.

The comments about the advantages of speedy resolution are interesting and particularly apposite for TUPE scenarios involving a large degree of uncertainty for the affected employees. There is, however, currently no prospect on the horizon of a fast-track tribunal procedure being introduced.

Salvation Army Trustee Co v Bahi and others UKEAT/0120/16 judgment available here

 

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TUPE update

25 May 2017

This session will provide an update on all key TUPE developments over the past year or so.

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