In the case of Lidell’s Coaches v Cook the Employment Appeal Tribunal analysed the application of an exemption under TUPE for service provision changes which are intended to be carried out “in connection with a single specific event or task of short-term duration”.
The 2006 TUPE (Transfer of Undertakings (Protection of Employment)) Regulations apply to a service provision change. A service provision change will occur where:
- There is a change in contractors carrying on activities for a client or contracting back in of activities previously carried on by a contractor; and
- "the client intends that the activities will, following the service provision change, be carried out by the transferee other than in connection with a single specific event or task of short term duration"; and
- "the activities concerned do not consist wholly or mainly of the supply of goods for the client's use".
Previously there has been precious little guidance from the Tribunals about what is meant by a “single specific event or task of short term duration”.
However, some governmental guidance was given when TUPE was amended in 2006. This gave the example of a contract for the provision of security advice to the Olympic Games which covers a period of years. The government’s view was that this would not be covered by the exemption because although for a specific event it was not for a short term duration. However, in relation to a contract for the provision of security staff to the Olympic Games itself, this would be covered by the exemption as the contract was short term.
Liddell’s had five contracts with the local authority to provide transport for school children whose school had temporarily closed. The contracts were each for a period of one year from 2010 to 2011.
Before the end of 2011 the local authority retendered all 5 contracts for the year 2011 to 2012. Liddell’s won only one of the five contracts and three others were won by Abbey Coaches Limited. The contracts were again for a period of one year only.
Mr Cook’s employment was terminated by Liddell’s on the loss of the contracts. Mr Cook argued that his employment should have transferred under TUPE to Abbey Coaches.
The Tribunal concluded that there had been no TUPE transfer in this case. Their reasoning was that although the circumstances satisfied all other conditions necessary for a service provision change, the nature of the contract was such that it was for a “single specific event or task of short term duration.”
The Tribunal’s reasoning was that the local authority’s requirement for transportation services was finite and would end upon the construction of a new school in June 2012. In coming to this conclusion the Tribunal took into account the fact that transport contracts of this type were commonly awarded for periods of 3 to 5 years.
Mr Cook appealed against this decision.
The EAT concluded that the exemption relating to specific events or tasks of short term duration applied in this case.In coming to this conclusion the EAT noted that it was unclear from existing case law and the government’s guidance whether the exclusion applied to:
(a) all single specific events and all tasks of short term duration; or
(b) only those events or tasks which are both single specific and of short term duration.
The EAT preferred option (a). With this in mind, the EAT upheld the Tribunal’s decision concluding that the contract was short term in the context of contracts of this sort ordinarily being for 3 to 5 years.
Although the EAT provided some helpful technical guidance on how the exemption relating to single specific events and tasks of short term duration will be interpreted, the decision in this case may well be confined to its facts.
It is clear that in many industries it is not unusual for contracts to be for short periods. As such the situation remains that Tribunals will need to consider the circumstances of each contract. In light of this, contracts for periods short of a year (e.g. one month or even a matter of weeks) may still be considered to be outside of the scope of this exemption.