TUPE Service Provision Changes

[Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett. Thanks also to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

On a service provision change under TUPE does the client for whom the activities are carried out have to remain the same?

Yes, said the Court of Appeal in McCarrick v Hunter.

Mr McCarrick was employed in the provision of property services to a property company, the managing director of which was a Mr Hunter. The lender on the properties appointed Law of Property Act Receivers who thereafter assumed control of the properties and appointed a new property services company, King Sturge. Mr McCarrick did not become employed by King Sturge but by Mr Hunter directly. He carried out property management services assisting King Sturge. Mr McCarrick was then dismissed by Mr Hunter and he brought a claim for unfair dismissal. To do so, however, he had to show his employment was continuous between his respective employers.

He argued there was a service provision change under Regulation 3(1)(b) of TUPE. The employment tribunal upheld his claim. But the EAT reversed this.  Regulation 3(1)(b)(ii) of TUPE provides that a service provision change occurs where activities cease to be carried out on a client's behalf and are, instead, carried out by a subsequent contractor on the client's behalf. That, said the EAT, had to be read as meaning the same client. Here the properties had changed hands and the client was not the same.

The Court of Appeal agreed. Although counsel for Mr McCarrick argued that a purposive approach ought to be applied to Regulation 3(1)(b), Elias LJ considered that there was no basis for giving the language of the regulation an artificial or expanded meaning.  This was domestic legislation and was not giving effect to EU law.

Elias LJ did not rule out a purposive interpretation for some aspects of service provision change. For example, it might be necessary "not to be too pedantic" with respect to the question of whether the activities carried on before or after an SPC are sufficiently similar. Likewise, a broad approach could be taken to the question of whether an employee is employed in the service transferred. But there was no room for a purposive construction with respect to the scope of Regulation 3(1)(b) itself.