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TUPE Service Provision Changes - Short-Term Arrangements

Under Regulation 3(3)(a)(ii) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), TUPE does not apply where immediately before a service provision change the client intends that the activities will, following the service provision change, be carried out by the transferee in connection with 'a single specific event or task of short-term duration'.

In ICTS UK Limited v Mahdi and Others, the Employment Appeal Tribunal (EAT) found that in determining the client's intention in this regard, the Employment Tribunal (ET) must consider not only what happened leading up to the service provision change but also what happened afterwards.

Mr Mahdi and nine other claimants were employed by ICTS UK Limited, which had a contract with Middlesex University to provide security services at its Trent Park Campus. In 2012, the campus was closed, but ICTS continued to provide security services at the now vacant site. In July 2013, the site was purchased by a Malaysian organisation, AUCMS. ICTS continued to protect the site, but were then told that the contract for services would be going out to tender. There was no evidence of a tender process actually taking place, but ICTS were subsequently informed that a new security company, First Call, had been appointed.

The question then arose as to whether there was a TUPE transfer. On 8 November 2013, First Call wrote to ICTS stating that, on acquiring the site, AUCMS had merely asked ICTS to provide limited security at the campus for a short-term duration, in a 'caretaker role', until building works commenced. Whilst these arguments were not strictly relevant, focusing as they did on AUCMS's intention when it acquired the site, rather than when ICTS ceased to provide security, First Call used them to support its contention that there was no relevant transfer for the purposes of TUPE. ICTS disagreed. On 11 November, Mr Mahdi and his co-workers lost their jobs and, on account of the dispute as to whether or not there was a TUPE transfer, brought unfair dismissal claims against both ICTS and First Call.

The ET found that there was no relevant transfer of the claimants' employment from ICTS to First Call. Whilst acknowledging that the central question was AUCMS's intention in relation to ICTS when the latter ceased to provide security in November 2013, rather than when AUCMS acquired the site in July 2013, the ET deemed the earlier events relevant and was in no doubt that AUCMS had engaged ICTS 'to undertake a task of short-term duration' because of the urgent need to secure the unoccupied site. The ET went on to conclude that it was clear on the evidence that AUCMS intended either to redevelop the site or to re-open the campus after building works had taken place. The provision of security services by First Call pending redevelopment of the site was therefore 'a short-term operation'. There was therefore no relevant transfer and only ICTS could be liable. The ET specifically declined to make any findings with regard to events since 11 November 2013 up to the date of the hearing.

The EAT allowed ICTS's appeal. In its view, the ET had erred in declining to make any findings with regard to what had taken place since 11 November 2013. In Robert Sage Limited v O'Connell, the EAT had found that a 'hope and a wish' that following a service provision change activities would be carried out by a transferee in connection with a task of short-term duration was not the same as an intention that they would be so carried out. In reaching a decision as to intention, subsequent events can be relevant, and it would be an error of law entirely to ignore them and to fail to make findings of fact in relation to them if they did have a bearing on the decision as to the client's true intention. In this case, there was evidence that, as at the date of the hearing, no planning permission had been granted for any significant building work at the site and none had taken place. The ET had not taken this into account, however.

In the light of its findings, the EAT remitted the matter to the ET to reconsider its decision on TUPE Regulation 3(3)(a)(ii).

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.