A "service provision change" (more commonly known as outsourcing) is excluded from the scope of the TUPE Regulations where the outsourced activities are in connection with a "single specific event" or a task of "short term duration". But what does that mean in practice? The Employment Appeals Tribunal gives some insight in the recent case of Liddell's Coaches v Cook & Ors .
Mr Cook was employed by Liddell’s coaches as a bus driver. Liddell’s had won five contracts to transport children to other schools in the area, while their school was being rebuilt. These contracts began in 2011, but Liddell’s was invited to bid for further one-year contracts, covering the period up to the scheduled opening of the new school. Liddell’s won only one of these extended contracts, and the others were awarded to another company, AC Ltd.
As a result, Liddell’s no longer required Mr Cook’s services after July 2011, but argued that his employment had transferred to AC Ltd, under the TUPE Regulations. Naturally AC Ltd denied liability for Mr Cook’s employment and Mr Cook brought a claim in the Employment Tribunal for unfair dismissal.
The Tribunal found AC Ltd had no liability for Mr Cook’s employment, on that grounds that the relevant "service provision change" was excluded from the scope of TUPE by a specific section of these Regulations which provides that no "service provision change" occurs if a client's intention is that the activities being contracted for will be carried out "in connection with a single specific event or task of short-term duration". AC Ltd successfully argued that the contracts for 1 year amounted to a "single specific event".
The Tribunal referred to guidance issued in 2006 by (the then) Department for Trade and Industry ("DTI") to the effect that the Government's intention was that an event or task would have to be both "single specific" and of "short-term duration", to be excluded from TUPE. The Tribunal found that the "single specific event" was the rebuilding of the school, and that in the particular circumstances, given that that transport contracts were typically awarded for three to five years rather than just one, it was correct to see the 2011/12 contract as one of short-term duration. As a result, this meant that liability for Mr Cook’s dismissal rested with Liddell’s alone as his employment (or rather the liability for his employment) did not transfer to AC Ltd.
When Liddell’s appealed to the Employment Appeals Tribunal ("EAT"), they were unsuccessful. The EAT agreed that the Tribunal had reached the right decision, though it did not fully support its reasoning. The EAT’s view was that "single specific events" stand apart from "tasks of short-term duration" as distinct categories of excluded transfers. In short, this means that short-term duration tasks can be excluded from TUPE, independently of whether or not they relate to a single specific event.
Whilst this decision could provide another way to argue that TUPE does not apply, it does arise from a specific set of facts and so may not be easily replicated. In many industries it is not unusual for contracts to be for short periods and where a dispute arises, it is likely that Tribunals will need to carefully consider the particular circumstances of each contract.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.