TUPE and short term contracts

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

Are events following a putative service provision change relevant in determining whether it was the client’s intention that the contract awarded be short term, and caught by the short term task exception?

Yes, held the EAT in ICTS UK Limited v Mahdi.

ICTS had a contract to provide security services to Middlesex University at one of its former campuses. Middlesex sold the site but ICTS continued as service provider. The new owner then put the security service out to tender. Mr Mahdi lost his job when the contract was taken over by a new contractor, First Call.

First Call disputed there was a TUPE transfer on a number of grounds, one of which was that, whereas ICTS had a contract to secure an operating site, First Call had a contract simply to look after the site pending its redevelopment by the new owner. The new contract was, therefore, First Call said, a contract for a single specific task of short term duration and so excluded from being a service provision change by virtue of TUPE, Reg 3(3) (a) (ii).

The exclusion only applies, however, where it is the client’s intention that the activities concerned are to be carried out in connection with a task of short term duration. An Employment Judge accepted First Call’s argument that when the contract had been granted it was the intention that the contract was to be for a limited period, to look after the site pending construction.

But by the time of the hearing no planning permission had been obtained and no building work had commenced. On appeal, the EAT said this may have been relevant, and should have been taken into account by the Employment Judge. The Employment Judge therefore erred in law in not doing so, and the case was remitted for a re-hearing by the employment tribunal.

Given that the EAT has previously decided, in Robert Sage Ltd v O’Connell [2014] IRLR 428 that an intention is more than a “hope and wish”, subsequent events, held the EAT, can be relevant in deciding a client’s intention for the purposes of Reg 3 (3) (a) (ii).