TUPE - Service Provision Change

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

Is there a service provision change under Reg 3(1)(b) of TUPE when the service is conducted in a fundamentally or essentially different manner following the changeover?

No, says the EAT (Langstaff P) in Johnson Controls v UK Atomic Energy Authority, but this is a question of fact in each case and requires an holistic assessment by the employment tribunal.

The claimant was a taxi administrator employed by Johnson Controls, which provided a taxi administration service for its client, United Kingdom Atomic Energy Authority. UKAEA then terminated this arrangement and took the activity of booking taxis in-house. Instead of using a taxi service administrator, it decided its secretaries could book taxis directly with taxi firms. Booking taxis no longer existed as a centralised service.

The Employment Judge held that, as a consequence, the services carried out after the change were essentially different from those carried out before and there was no TUPE transfer. The EAT upheld this decision, applying the guidelines set out by Judge Peter Clark in Enterprise Management Services Ltd v Connect-Up Ltd (EAT/0462/10). The process of defining the activities involved, and whether they remained the same, involved a question of fact for the employment tribunal, which was to be trusted to make that assessment.

We tend to forget that in 2005 the Government's public consultation document on what became the TUPE Regulations 2006 considered that there should be a relevant TUPE transfer by way of service provision change even where the service is to be provided in the future in a new or innovative manner (see para 27). But, contrary to this aspiration, recent EAT decisions, of which Johnson Controls is the latest, suggest there will be no service provision change under Reg 3 (1) (b) when the service is significantly re-modelled.