The Employment Appeal Tribunal has held that there was no service provision change under TUPE when a new contractor took over a service for its own commercial purposes.
A local council subsidised a community interest company to provide a bus service from a council-owned car park to the city centre. Another company started up a similar bus service for the same route but for its own commercial purposes without any subsidy from the council, which led to the previously subsidised service being abandoned.
A group of bus drivers had argued that their employment had transferred to the new commercial operator because it took over the route they had worked on. The new operator went on to run the route using its own staff and buses.
In order for the bus drivers to succeed in their claim of a service provision change taking place, it was essential that the client before the service change remained the same afterwards. However, the council was not the client of the new commercial service. The new operator was not carrying out the activities on behalf of the council and the council was nothing more than an interested bystander. For this reason, there was no service provision change.
Whilst it is possible to have sympathy for the bus drivers believing this was a continuation of the service, which they thought should have resulted in a service provision change in accordance with TUPE, there is obviously a need to look at all of the required elements for TUPE to apply; it is not uncommon for the client to change, which becomes apparent when all of the circumstances are properly assessed. It is also is a useful reminder of what ‘client’ means in this context; the service users (in this case, the passengers) may remain the same, but they are not the clients for the purposes of TUPE.
Due to the current environment, we may see more council-run subsidised services turning into commercial ventures leaving employees without any right to transfer to the subsequent provider.
Case reference: CT Plus (Yorkshire) CIC v Black and others