A year since our last blog on this topic, the EAT has issued further guidance on how you assess the scope of the TUPE exemption for tasks of short term duration.  This case is helpful as it reinforces the primacy of the client’s intention when deciding whether TUPE applies upon the replacement of a contractor at short notice.

TUPE does not apply in the context of service provision changes (i.e. where a client either outsources an activity, “in-sources” it or changes the identity of the contractor) if the client intends that the activities will relate to a single specific event or task of short term duration.

In Swanbridge Hire, the client engaged a contractor, Kitsons, to complete works on five boilers. A year into the project, Kitsons was replaced by Swanbridge. At that time, work on three of the boilers was 80% complete. No progress had been made on the other two boilers. It took Swanbridge a further eight months to complete the project.

The tribunal held that TUPE applied when Kitsons was replaced by Swanbridge. It decided that Swanbridge had not taken on activities relating to an event or task of short term duration.

The EAT found the tribunal had got this wrong for two reasons. Firstly, the tribunal had failed to consider the intention of the client at the time of the alleged service provision change. Secondly, it had determined that the task was not of “short term duration” by looking at duration of the entire project from start to finish rather than the duration of Swanbridge’s assignment.

One slight wrinkle is that the EAT has not resolved an ongoing debate about the interpretation of this exemption.  When it last considered this issue (in Liddell’s Coaches) the EAT said that TUPE would not apply where the activities relate to a single event, regardless of its duration.  It was therefore only tasks that had to be of short term duration to come within the exemption.

This contradicts SNR Denton, a slightly earlier decision in which a different EAT judge said that events or tasks must both be of short term duration for the exemption to apply.

In this latest decision, the EAT suggested that the approach in SNR Denton was right, but this is not binding on subsequent employment tribunals as it was not part of its essential reasoning (ie obiter dicta). Until the Court of Appeal resolves these conflicting EAT decisions, there remains an unwelcome level of uncertainty about the ambit of this exemption.