Changing buses and TUPE transfers
In CT Plus (Yorkshire) CIC v Black and others, the Employment Appeal Tribunal (EAT) was asked to consider whether or not there had been a service provision change for the purposes of TUPE, where the same service continued to be provided but not on behalf of the original client.
CT Plus are a Community Interest Company (CIC) which operated a park-and-ride bus service from a car park, which is owned by Hull City Council on the outskirts of Hull, in to the centre of the city. The route was subsidised by the council and the arrangement governed by a contract between the council and CT Plus. A commercial operator (Stagecoach) gave notice that they would begin to operate a service on the route that would not require a subsidy and this resulted in the council giving notice to CT Plus to end their service.
Under the Transfer of Undertakings (Protection of Employment) Regulations 2006, one of the circumstances where a transfer will take place is if there has been a service provision change. This can occur in one of three situations:
- Where a client ceases to carry out activities on its own behalf and assigns them to another (a contractor). This might occur when work is outsourced;
- Where activities cease to be carried out by a contractor on a client’s behalf and are reassigned to another contractor. This might be where the contractor providing an outsourced service changes, and;
- Where the activities cease to be carried out by a contractor and instead are carried out by the client. This might be where outsourced services are brought back in house.
In this case, an employment tribunal decided that there had been no TUPE transfer. Amongst other findings, Stagecoach had not taken over anything directly from CT Plus, they provided their own buses and there was no contract that existed between Stagecoach and the council in the way that there had been with CT Plus.
The EAT agreed. An “essential scoping feature of the legislation” is that the client must remain the same throughout. The client is the body that either carries out the activities or commissions them from others. In the case of CT Plus, the client had been Hull City Council but after their contract ended, they ceased to be the client.
22 September 2016
©2016 SCRASE LAW LTD. THIS POST IS FOR GENERAL INFORMATION ONLY AND IS NOT ADVICE. YOU ARE RECOMMENDED TO SEEK COMPETENT PROFESSIONAL ADVICE BEFORE TAKING ANY ACTION ON THE BASIS OF THIS POST.