As a litigation specialist and member of the Chartered Institute of Arbitrators, I read with some interest the case of Arch Initiatives v GMW Mental Health NHS Foundation Trust & Others  UKEAT/0267/15/RN.
Here’s the scenario – it’s one that I view with a commercial litigation eye as much as an eye to employment law. Back in January 2013, Bolton Council wanted to retender contracts for drug and alcohol services. For policy reasons, it decided to split the provision of these services; in other words, services currently being provided by one provider (the incumbent) were to be split between two new providers.
What could go wrong? Well, one of the new providers denied that nine employees from the incumbent constituted an undertaking or part thereof for the purposes of TUPE. The new provider argued, therefore, that their contracts did not transfer across.
There followed a 17-day preliminary hearing before an employment tribunal (I’ve spent less time – five days in evidence – in the High Court arguing over millions). The new provider lost. The new provider then took the matter to the Employment Appeal Tribunal, and lost again on all counts.
Proper due diligence might well have avoided this. Get a lawyer to advise you. There will be a cost involved, but the lawyer will have insurance if it goes wrong.
Even had the TUPE issue not been avoidable, the new provider could – and perhaps should – have gone through a proper redundancy procedure, looking at the economic, technical or organisational (ETO) defence built into TUPE. Instead, the new provider and its lawyers decided to embark on a legal challenge that must have cost tens of thousands of pounds, if not more, and considerable amounts of management time (sometimes at least as valuable). Someone somewhere lost their sense of cost v benefit.
When litigating, it’s important to be commercial and sensible. Sometimes, you have to step back from the fight and advise the client from a strict cost-benefit perspective. Client are not interested in litigation per se; clients want the problem sorted quickly. Sometimes that’s not possible, and you have to fight it out – but that should be the last resort.
For someone who has done nothing but litigate for 20 years, the case of Arch Initiatives was a perfect example of how not to do it. Too much was spent arguing about too little for too long.
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