ICTS UK Ltd v Mahdi and others

The Employment Appeals Tribunal (EAT) has held that when considering whether a transferor “intends” that services will be carried out by a transferee in connection with a single specific event or task of short-term duration it can consider events after the alleged transfer.

Facts

TUPE applies where there is a “relevant transfer”. A relevant transfer can be a business transfer or a service provision change. In order for there to be a service provision change the party must also intend that the relevant activities will, following the service provision change, be carried out by the transferee other than in connection with a single specific event or task of “short- term duration”. This case considered in what circumstances this task of ‘short-term duration’ exception applied.

ICTS UK Ltd (ICTS) had a contract with Middlesex University to provide security at its Trent Park campus. In 2012 the University closed the campus and ICTS continued to guard the vacant site.

In July 2013 the site was purchased by a Malaysian university AUCMS. ICTS continued to provide security and produced a draft contract for the new owners to sign. However in October 2013, AUCMS informed ICTS that it would appoint a new security company, First Call Secure Group Ltd (First Call) with effect from 11 November 2013. In a letter sent by email to ICTS on 11 November 2013, First Call refused to take on any of the ICTS security guards as it said that there had been  no relevant transfer under TUPE.

Ten ICTS security guards who lost their jobs brought claims. In response to these, First Call argued that the ‘short-term duration’ exception in TUPE applied. It stated that as ICTS had entered into a contract to secure what was intended to become a building site, pending completion of the major renovation of the site, and that this construction project was therefore a task of ‘short-term duration’.

An ET rejected First Call’s argument that the activities it had been instructed to carry out were different from those previously provided by ICTS. However it accepted that the activities were intended to be carried out in connection with a task of short-term duration. The ET judge considered that the relevant intention was that of AUCMS as at 11 November 2013 and that he was prevented from looking at subsequent events in determining that intention. He found  that it was logical to infer that the site would only remain unoccupied for a limited period, even though there was no evidence as to how long this period was likely to be. The ET therefore held that there had been no relevant transfer under TUPE.

Outcome

The EAT held that the ET judge had erred in wholly ignoring events occurring after 11 November 2013. Although the exception is based on the intention at the time of the transfer, the EAT held that subsequent events can be relevant in deciding what that relevant intention was. For example, the  ET judge disregarded the fact that as at the date of the tribunal hearing, no planning permission had been granted for any major building project at the site and no building work had taken place.

The EAT was not convinced that this failure made no difference to the outcome as the evidence regarding the current state of the site may have affected the judge’s decision.

ICTS also sought to argue that the ET judge had misapplied the burden of proof in relation to the exception. It argued that the party relying on the exception should establish that it applies. The EAT held that there is not a positive burden of proof on a service provider to adduce specific evidence of their client’s intention. Rather, it was appropriate for the tribunal to draw inferences of the client’s intention from the facts as presented.

The EAT allowed the appeal and remitted the case back to the ET.

Points to note

This case emphasises the importance of establishing the relevant party’s intentions at the time of the transfer. This can be done by using post-transfer events as these may well have bearing on what the party intended.