New TUPE Decision: RCO v Unison (C of A)

The decision of the Court of Appeal in RCO Support Services Ltd v UNISON (12th April 2002) is now available on the Court of Appeal website.

For details of the EAT's decision, see my bulletin dated 6th July 2000.

Facts

The Aintree Hospitals' NHS Trust decided to transfer much of the work from one hospital to a nearby hospital, three miles away. The issue was whether there was a transfer of undertakings in relation to the cleaning and catering support services (which were undertaken by different companies, one at each of the two hospitals).


The Decisions Below

Both the employment tribunal, and the EAT, held that a transfer of undertakings had taken place.


The Court of Appeal's Decision

The Court of Appeal upheld the decisions below, holding that a transfer had taken place.

Interestingly, Mummery LJ's judgment was supportive of the ECJ's decision in Suzen, indicating movement away from the 'let's all be rude about Suzen' attitude which has appeared in so many recent decisions.

He held:

"24. I agree that it has become clear from Suzen and later judgments that the Court of Justice now interprets the Directive as setting limits to its application in contracting out cases, which were not expressly identified in Spijkers or in Schmidt and other earlier judgments of the Court of Justice. In particular, the mere fact that the putative transferee carries on the same services as the putative transferor had done does not, by itself, support the conclusion that an entity retains its identity. It is not correct to treat that single circumstance as determinative in favour of a transfer. Indeed, there may be no scope for the application of the Directive in a case where, although the same labour-intensive activities are continued or the same services are supplied by a new contractor, none of the workforce has been taken on."
Mummery LJ then goes on to consider the position if a putative transferee deliberately refuses to take on incoming employees so as to avoid the application of the TUPE Regulations. He describes this as "circular" and "not the real point", emphasising that whether staff transfer is merely a factor.

• click here for the full transcript