If your firm wins a substantial client appointment in place of the incumbent advisers, should your firm be concerned about the potential transfer to it of employees from the outgoing firm who undertook work for the client? This will depend upon how the handover takes place and in particular the transfer of work in progress will be a key factor in determining whether or not TUPE applies.

In a recent ruling the Employment Appeal Tribunal considered whether TUPE applied when one law firm lost a tender to provide legal services to a client and another firm was appointed to carry out future work.  Agreeing with an earlier tribunal decision, the EAT ruled that on the facts there was no service provision change for TUPE purposes where no work in progress transferred and there was a significant run off in relation to existing matters. 

Ward Hadaway was on a panel of solicitors providing legal services to the Nursing and Midwifery Council (NMC). There was no contractual obligation on the client to give work to the lawyers nor on the lawyers to accept work. Ward Hadaway's contract with the NMC was renewed from time to time and expired in September 2007. The NMC appointed Capsticks to be its sole provider of legal services following a tender. Much of the work previously carried out by the panel firms was taken in-house by the NMC and the work undertaken by Capsticks was more limited and was carried out by a paralegal, rather than by qualified lawyers as at Ward Hadaway. 

After its contract ended, Ward Hadaway continued to work on a large number of existing cases. There was no transfer to Capsticks of any of Ward Hadaway's work in progress.  All new work went to Capsticks.

Where a "service provision change" takes place under the 2006 TUPE Regulations 2006, employees who are assigned to the relevant activities enjoy the protection of certain employment rights including the automatic transfer of their employment to the new service provider. 

When two former Ward Hadaway employees brought claims for unfair dismissal, the employment tribunal found that there had been no service provision change. It distinguished the work in progress from the expectation of future work, ruling that only the work in progress could amount to activities capable of being transferred under TUPE.  The tribunal did not consider that the future possibility of receiving instructions from the NMC could amount to such activities. There was no cessation of the relevant activities and therefore no service provision change because the work in progress remained with Ward Hadaway. The EAT upheld the tribunal's finding.

To date there have been few cases dealing with service provision changes in the context of professional services and this is the first to reach the Employment Appeal Tribunal. We may not have heard the last of this particular issue.

Ward Hadaway Solicitors v Love and others UKEAT/0471/09

For more information on these issues please contact

Fergus Payne

or your usual Lewis Silkin contact