EAT TRANSFER OF UNDERTAKINGS – Service provision change
Employment Judge entitled to find (a) that the activities carried out by outgoing contractor were not essentially or fundamentally the same as those carried out by the incoming contractor and (b) that there was fragmentation of the service after the putative transfer date such that no SPC transfer took place.
Peter Clark laid down the following principles to be derived from the case-law: ‘ . . (2) The expression ‘activities’ is not defined in the Regulations. Thus the first task for the Employment Tribunal is to identify the relevant activities carried out by the original contractor: . . That was the issue on appeal in OCS, where the Appellants challenge to the activities identified by the Employment Tribunal failed.
(3) The next (critical) question for present purposes will be whether the activities carried on by the subsequent contractor after the relevant date [ . . ] are fundamentally or essentially the same as those carried on by the original contractor. Minor differences may properly be disregarded. This is essentially a question of fact and degree for the Employment Tribunal (Metropolitan, para. 30).
(4) Cases may arise . . where the division of services after the relevant date, known as fragmentation, amongst a number of different contractors means that the case falls outside the service provision change regime, . .
(5) Even where the activities remain essentially the same before and after the putative transfer date as performed by the original and subsequent contractors, an SPC will only take place if the following conditions are satisfied:
(i) there is an organised grouping of employees in Great Britain which has as its principal purpose the carrying out of the activities concerned on behalf of the client;
(ii) the client intends that the transferee post-service provision change will not carry out the activities in connection with a single event of short-term duration;
(iii) the activities are not wholly or mainly the supply of goods rather than services for the client’s use. [ . . ]
(6) Finally, by reg 4(1) the Employment Tribunal must decide whether each Claimant was assigned to the organised grouping of employees.’
Judges:
Peter Clark J
Citations:
[2011] UKEAT 0462 – 10 – 2112, [2012] IRLR 190
Links:
Jurisdiction:
England and Wales
Employment
Updated: 04 October 2022; Ref: scu.450278