In Seawell Ltd v Ceva Freight (UK) Ltd, the Scottish EAT again considered the meaning of ‘an organised grouping of employees’ in the context of service provision changes under TUPE, and followed the approach set out in Argyll Coastal Services Ltd v Stirling (above).
Ceva is a freight forwarding and management logistics business. Its workforce is organised into a group dealing with ‘inbound’ goods and a group dealing with ‘outbound’ goods. Mr Moffat was employed in the outbound group with seven other people. He worked 100% of his time on an account for Seawell, whilst his group colleagues worked on other accounts in addition to the Seawell account. Following Seawell’s decision to take the activity in-house, a dispute arose as to whether Mr Moffat had transferred to Seawell under TUPE. The tribunal concluded that TUPE applied because Mr Moffat spent 100% of his time on Seawell work.
However, the EAT held that the tribunal had failed to apply the law correctly. It should have identified an organised grouping of employees and then identified the activities carried out by that grouping. The EAT found that the only deliberately organised grouping of employees was that of an ‘inbound’ and an ‘outbound’ operation. There was no grouping organised for the purposes of the Seawell contract. Nor was it sufficient that Mr Moffat spent all his time on Seawell work to show that he was ‘an organised grouping’. TUPE also requires the organised grouping to carry out all the activities under the contract. Seawell took the whole contract back, not just the work performed by Mr Moffat.
This case follows the more restrictive approach taken recently by tribunals interpreting the service provision changes of TUPE. It highlights the need to organise employees specifically with reference to client needs and requirements.