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TUPE: Change of Service Provider: does TUPE apply if the services being provided change?

20 Oct 2016

Background

In order for TUPE to apply to a change in service provision, the services that are provided before and after the change in provider must remain “fundamentally the same”. Often it can be tricky to work out what that phrase means and the extent to which it is necessary to look at differences in the  detail of the service provided.

Case

Salvation Army v Bahi & ors [2016](UKEAT/0120/16/RN)

What does this case tell us?

In a nutshell, a Tribunal will take a fairly wide approach to determining whether the activities involved remain fundamentally the same. If it is apparent that the transferee will be undertaking very similar activities with similar outcomes to the transferor, the services will be regarded as fundamentally the same even if there are some differences in the way the service will be provided.   

Facts

In 2009 Coventry Cyrenians Limited (CCL) began operating two contracts on behalf of Coventry City Council to provide “accommodation based support” for men and women.  From 1 April 2014, after winning a wider contract, the Salvation Army Trust (SAT) began operating those services.

There were however fairly significant differences between the services:

  • CCL had provided support in 10 houses of multiple occupancy which were not staffed overnight whilst SAT operated the service from only two hostels which were staffed overnight;
  • CCL support workers worked normal office hours whilst SAT support workers operated from 7am to 7pm;
  • Under CCL’s service residents were expected to stay for 12 months, with  the possibility of staying up to 24 months, though in reality most moved on within six months. Under SAT  those accommodated were able to stay for a maximum of 112 days; and
  • CCL’s service users could be any age from 18 up while 25 was the minimum age for using the new service operated by SAT.

Decision

The Judge in the Employment Tribunal found that the services offered by the new provider were fundamentally the same as those offered by the old provider.  He described the services as “the provision of accommodation based support for homeless men and women”.

In determining the appeal the EAT set out the following principles that it found apply when a Tribunal considers how “activities” should be defined:

  • The word “activities” is to be given its ordinary, everyday meaning;
  • They must be defined in a common-sense and pragmatic way;
  • They should not be defined too generally, but the definition should be holistic; and
  • An excessively detailed definition would risk defeating the purpose of the SPC provisions.

The EAT found that, given that the majority of service users moved on within six months and there were no requirements in the Council’s contracts as to whether the accommodation was provided at more or fewer sites, the Judge had been entitled to define the activities as he had.

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