The EAT has held that, when deciding whether the "short-term duration" exception applies to a purported service provision change under the TUPE regulations, tribunals may consider events post-dating that change in order to determine the client's intention at the time of the transfer (ICTS UK Ltd v Mahdi and others).

Background

Under the TUPE Regulations 2006 (TUPE) a service provision change will take place when the client intends that the transferee will continue to carry out the pre-transfer activities post transfer, except wheresuch activities are intended to be carried out in connection with a single specific event or task of short-term duration. For this exemption to apply, the client must genuinely intend at the time of transfer that the activities will only be short-term; a desire or  hope for them to be short-term will not be sufficient.

Facts

ICTS provided security services to Middlesex University at one of its campuses. In 2012 that campus closed but ICTS continued to guard the vacant site. In July of the following year, the site was purchased by a Malaysian university (AUCMS) which had proposed to redevelop the site. ICTS continued to guard the site and offered to enter into a new contract with AUCMS for the provision of security services. However, in October 2013, AUCMS decided to appoint a new provider, First Call Secure Group (FCSG) for this purpose, with effect from November 2013. AUCMS informed ICTS that it would not be appointing any ICTS security guards to provide this service.

A number of ICTS security guards brought complaints against ICTS and FCSG, on the grounds that they had not been appointed to carry out the post-transfer activities. FCSG argued that there had been no service provision change under TUPE because the new contract for security provision was only intended to relate to a "task of short-term duration" as the security was only to be provided pending the renovation of the site.

Employment Tribunal's decision

FCSG gave evidence that the site would remain unoccupied for a limited period of time during renovation and that therefore the provision of security services to guard the vacant site related to a task of short-term duration.

The Judge accepted FCSG's argument that the provision of security intended to be a task of short-term duration. In reaching that conclusion, he considered only AUCMS's intention at the time that it appointed FCSG, and contended that he was precluded from considering subsequent events. He relied upon the case of Horizon Security Services v Ndeze and another in relation to this point. That case had held that an employment judge had erred by looking at whether a client's purported intention had been fulfilled at the time of the hearing, rather than looking at the intention at the time of the transfer.  He also accepted (although there was no evidence on this precise point) that the site would only remain unoccupied for a limited period, as it was being renovated.

ICTS appealed to the EAT.

EAT's decision

The EAT allowed the appeal. It disagreed with the Employment Judge that he was precluded from taking subsequent events into account when considering AUCMS' intention at the time of the transfer. For example, ICTS had given evidence (which was not challenged by AUCMS) that, at the time of the hearing, nine months after the transfer, AUCMS had still not obtained planning permission for redevelopment of the site and no building work had yet started. The EAT held that this evidence had to be relevant to AUCMS' intention in November 2013. As a general principle, it was an error of law not to consider subsequent events when determining a party's intention at the time of a transfer, provided that those subsequent events cast light retrospectively on that intention.

By contrast, it would have been an error to refer only to the outcome of the intention at the time of the hearing, (which was different from considering subsequent events which were relevant to that intention) so Ndeze remained good law in the EAT's view.

Comment

When determining a party's intention at a certain time, it is important to look in the round both at the professed intention and at whether anything has since happened "on the ground" which may support or cast doubt on it. For example, if a party professes to have intended that a building be refurbished but has taken no steps to do so several months later without a convincing explanation, that intention may well not be accepted by a tribunal. It is therefore important not only to express a clear intention that a task should be of short-term duration (if that is the case) but to be able to evidence that. The fact that a task ultimately does not turn out to be short term will not be fatal to a finding that it was intended to be, as long as the relevant party is able to show that it took steps which were consistent with this intention.

ICTS UK Ltd v Mahdi and others