TUPE in outsourcing 2018

The Claimant was employed by Sevacare as a homecare support assistant providing support to service users funded by Haringey Council. In 2016, Sevacare terminated its… Read more

The Claimant was employed by Sevacare as a homecare support assistant providing support to service users funded by Haringey Council. In 2016, Sevacare terminated its services in Haringey and care services were transferred to a number of other providers, based on their capacity and location. Some carers’ workloads were split between different providers, and in these cases those carers went to whichever provider had taken on 50% or more of their workload.

At an Employment Tribunal the new employer argued that TUPE did not apply because the services had been fragmented across a number of new service providers. The ET held that there has been a service provision change from Sevacare to one or more of the new providers. The Tribunal disagreed that there was fragmentation, holding that there was an “organised grouping of employees” for the purposes of Regulation 3 of TUPE, because the purpose of the activities was to provide care to service users and each of the claimants transferred to a provider which had taken on a group of employees dedicated to the provision of care to service users.

The EAT found that it had not been clear from the Tribunal judgement whether the relevant activities were the whole service Sevacare provided in Haringey (with Haringey Council as the ultimate client), or just a subset of this service (with one or more service users as the relevant clients). Clearly this was relevant to whether the activities remained the same pre-and post-transfer. If each separate tranche of work going to new provider was an activity in itself then the activities remained the same post-transfer. If the activities were the whole Haringey service, then this had been split up into lots of different parts when it went to different providers. Further, the Tribunal judge ought to have considered the question of fragmentation at the point where she decided whether or not the activities were fundamentally the same. Instead she had considered it in the context of whether there was an organised grouping of employees. The case was remitted for reconsideration.

Comment

This case is a helpful reminder of the correct application of the fragmentation principle. In cases where transferring employees are split between a number of new providers and an organised grouping becomes fragmented, it is easy to forget that the principle applies to activities rather than people. It is also important to apply the test at the stage where you are considering whether or not the activities are fundamentally the same before and after the transfer. If the way that the services are provided has changed so much that the pre-transfer activities are no longer identifiable, this will often prevent a service provision change from taking place – regardless of whether the other limbs of the test are satisfied.

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