Printer friendly

Return to homepage

June 2009 Updates

Establishing a service provision change under TUPE 2006

The Employment Appeal Tribunal has held in the case of Metropolitan Resources Ltd v Churchill Dulwich Ltd that, whether or not there has been a service provision change, is a question of fact for the Employment Tribunal to decide under TUPE 2006. The Tribunal should consider whether the activities carried out by the alleged transferee are fundamentally or essentially the same as those carried out by the alleged transferor.

This case involved a change in service provision in respect of an organisation which provided accommodation to asylum seekers. The organisation decided not to renew a contract it had in place with a particular service provider, "A Ltd". Instead, it decided to bring in a different service provider, "B Ltd", when its contract with A Ltd expired. B Ltd refused to accept that there had been a TUPE transfer of A Ltd's employees to B Ltd. B Ltd argued that the accommodation it was providing for the asylum seekers was not the same as the activity that A Ltd had been carrying out. It based its argument on two things. Firstly, the fact that the accommodation was in a different location. Secondly, the fact that the accommodation was offered for one extra night under the new contract.

The Employment Appeal Tribunal held that the two activities (i.e. the provision of accommodation for asylum seekers) were fundamentally or essentially the same. Accordingly, that there had been a TUPE transfer. It did not matter that accommodation was offered for an extra night or that the location at which the activity took place had changed. The Employment Appeal Tribunal made it clear that a difference in location would be highly unlikely, on its own, to determine that no service provision change had taken place. Similarly, the fact that the new contractor was performing some additional duty or function was unlikely to make a difference.

Holiday pay claims

The House of Lords has overturned the Court of Appeal's decision in Stringer v HMRC (sometimes referred to as Ainsworth v HMRC). The House of Lords has held that a claim for unpaid holiday or a payment on termination under the Working Time Regulations can be pursued as an unauthorised deduction from wages claim under the Employment Rights Act as well as under the Working Time Regulations. What this means in practical terms is that a worker can take advantage of the more generous time limits which apply to unlawful deduction claims. A claim for unlawful deduction from wages can be brought within three months of the last in a series of deductions, therefore allowing a claim to go back more than three months if the underpayments form part of a series. Accordingly, an employee on long-term sick leave could have a claim for accrued but unpaid holiday in respect of the full period of absence, which could date back several years in some cases.

Factors to take into consideration when looking at reinstatement

The Employment Appeal Tribunal has commented in Central & NW London NHS Trust v Abimbola on the factors which an Employment Tribunal should take into account when considering reinstatement. Reinstatement occurs when an Employment Tribunal orders an employer to re-employ an employee in the same job that they were doing prior to their dismissal and on the same terms and conditions.

The Employment Rights Act 1996 requires an Employment Tribunal to have regard to:

  1. Whether the Claimant wishes to be reinstated.
  2. Whether it is practicable for the employer to comply with an order for reinstatement.
  3. Where the Claimant caused or contributed to his dismissal, whether it would be just to order his reinstatement.

The Employment Appeal Tribunal held that the existence of mutual trust and confidence between the employer and ex-employee was also a relevant factor when addressing the question of practicability of compliance with an order for reinstatement.

In this particular case, the Employment Tribunal had failed to take into account relevant factors, including, among others, the finding that the Claimant was evasive and, on one occasion, dishonest in giving evidence at the hearting. The Employment Appeal Tribunal held that the employer could no longer be expected to trust the Claimant and the reinstatement order was set aside.

Although the Employment Appeal Tribunal did not specifically deal with this point, we would suggest that an Employment Tribunal would need to take into account similar factors where it is considering an ex-employee's request for re-engagement (i.e. an order that the employer re-employs the individual in a broadly similar job to the one they were doing prior to the dismissal).


In order to view the embedded animation, you must first enable Javascript and/or get the Adobe Flash Player. We apologise for the inconvenience.

SRA number 404293