The case of Clearsprings Management v Ankers and others comes hard on the heels of another EAT decision (in the case of Kimberley Group Housing v Hambley) concerning a similar service provision change relating to the provision of accommodation for asylum seekers (termed "service users").
The problem is that the EAT comes to a different answer in this case – a reminder that TUPE cases are always decided on their facts.
In the Kimberley case, the service users had previously been accommodated in one hostel. There was a change of service provider and the users had been split 89%/11% between two new hostels and two new service providers. What should happen to the work force who provided the service? The EAT decided that their contracts transferred under TUPE and, as the vast majority of the activity in question had passed to one transferee, it was to that transferee alone that all liabilities as employer should transfer under TUPE.
In the case of Clearsprings, when a similar contract came to an end, the tribunal again decided that there was a service provision change but that -
- under TUPE there could only be one transferee, which was not the case here;
- there had been an interim period between contracts so it was not possible to identify a 'transfer date'; and
- there was such a fragmentation of the undertaking that it was impossible to apply TUPE. In this case, the claimant employees had not been assigned to any particular service user or any particular property. Different properties were dealt with in different ways as the contract came to an end.
For these reasons, the employment tribunal decided that there had been no TUPE transfer. The EAT agreed.
The employment tribunal was wrong to suggest that there can only ever be one transferee under a TUPE transfer. In a case (such as Fairhurst Ward v Botes) where a contract was split between two transferees but each transferee had received an identifiable part of the undertaking, it was easy to say which part the claimant had been assigned to and TUPE could apply. However, that was not the case here.
Point to note –
- When dealing with a service provision change, TUPE may now apply without the need to show that a ‘separate economic entity’ has transferred. However, the Clearsprings case is a reminder that, even if the activity remains the same pre- and post-transfer, there must be also continue to be an identifiable ‘organised grouping of employees’ for TUPE to apply. So, TUPE may not apply to every service provision change.