Tuesday, 25 March 2014

TUPE: Service Provision Changeover

Thanks to Joanna Cowie of SA Law for preparing this case summary
Was a tribunal entitled to rely on contractual documentation between the parties when determining the "activities" of a service provision change for the purposes of reg 3(1)(b) TUPE?

Yes, held the EAT in the case of Qlog Ltd v O'Brien.

McCarthy Haulage Ltd had a contract with Ribble Ltd to carry out transport and delivery services. McCarthy employed drivers to carry out those deliveries. McCarthy also employed a transport manager and four shunters, who were responsible for managing the deliveries. The contract ended on 17 September 2011.

The new provider (Qlog Ltd) started on 19 September 2011. The transport manager and the shunters transferred to Qlog. However Qlog denied that TUPE applied to the drivers on the basis that Qlog would not be providing the transport services - as they would be sub-contracted to individual haulage providers.

The tribunal considered that the interpretation of "activities" was critical for determining whether there was a service provision change. In doing so, the tribunal considered the written agreement between Ribble and Qlog which stated that "[Ribble] wishes to transfer the provision for part of its transportation, delivery and distribution services from its incumbent provider to [Qlog]."

Relying on this agreement between the parties as compelling evidence of their intentions, the tribunal found that the "activities" which were carried out were principally the transportation of goods. The tribunal found that, whilst the mode of carrying out that activity post-transfer was very different, the actual activity which Qlog had agreed to provide was the same.

Qlog appealed the decision, challenging the Tribunal's approach to the identification of a service provision change for the purposes of reg 3(1)(b) TUPE.

The EAT rejected the appeal. In making its decision, the EAT applied the case of Johnson Controls v UK Atomic Energy Authority, and held that the identification of the "activities" undertaken before and after the provision change was a matter of fact and degree for the tribunal.

Therefore, the EAT held that the tribunal had been entitled, when characterising the "activities" undertaken by Qlog, to have regard to the way in which these were set out in the contractual documentation between the parties.

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