A few months ago we reported on the case of Eddie Stobart v Moreman & Others, which concerned the definition of an ‘organised grouping of employees’ under TUPE. In Eddie Stobart, it was held that for an organised grouping to exist, there had to be an element of deliberate planning or intent – working mainly for a particular client because of shift patterns or working practices was insufficient. This principle has now been followed in the recent EAT decision in Seawell v Ceva.
The claimant, Mr Moffat, was employed by Ceva, a logistics and freight forwarding company who carried out work for a number of clients, including Seawell. Mr Moffat spent 100% of his time working on Seawell tasks, with several other employees splitting their time between Seawell and other clients. Seawell then decided to take the work carried out by Ceva in-house, and terminated their contract with Ceva in January 2010. Ceva asserted that Mr Moffat’s employment had transferred to Seawell under TUPE, but Seawell refused to accept this.
In order for TUPE to apply, there requires to be “an organised grouping of employees…which has as its principal purpose the carrying out of the activity concerned on behalf of the client.” The Employment Tribunal held that Mr Moffat himself could constitute an organised grouping, and that as 100% of the work he carried out was for Seawell, this was his principal purpose; TUPE therefore applied.
The EAT disagreed. Applying the decision in Eddie Stobart, they held that an ‘organised grouping’ denotes a group of employees deliberately put together by the employer for the purpose of carrying out the relevant client work: it could not be “a matter of happenstance”. Ceva’s employees were split into an outbound and an inbound operation, with both operations working for a variety of clients – there was no evidence to suggest that they were organised in this was because of the Seawell contract, and accordingly TUPE did not apply.
This case serves as yet another reminder to employers that the fact that an employee spends most of their time on a tasks for a particular client does not mean that they will necessarily transfer under TUPE.