The EAT in Eddie Stobart Ltd v Moreman confirmed that in order for there to be a service provision change (SPC) under TUPE, there must be a recognised team principally serving a particular client.
The conditions that must be met before a SPC will amount to a transfer for TUPE purposes are:
- there must be an organised grouping of employees;
- the group must carry out the activities as its "principal purpose"; and
- the client intends the activities to be continued after the SPC.
In this case, Eddie Stobart (ES) ran a logistics business out of a depot at Manton Wood on behalf of two separate clients. In practice, the work was split into a day shift for one company – Vion, and a nightshift for the other. On the closure of the depot, Vion contracted with another provider. Inevitably, ES and Vion disagreed as to which of them was responsible for those employees who ES had decided, on the basis of an automatic bar coding system that tracked the employees' work, were assigned to the Vion contract.
The EAT decided that there was no SPC and the day shift workforce had not therefore transferred to the new provider. For there to be an "organised grouping of employees"; the employees must be organised by reference to the requirements of the client. Although it tended to be the case that it was the day shift employees who provided the services to Vion, this was not the result of deliberate planning. The day shift could not therefore be described as the "client team" for Vion.