If you are responsible for bidding for contracts, you will doubtless be familiar with TUPE, the legislation which protects employees’ employment rights when a contract is passed from one contractor to another. As a rule of thumb, whether you are the incoming or outgoing contractor, you can expect TUPE to apply on a change of contractor. However, a recent case in the Employment Appeal Tribunal Horizon Security Services Limited v (1) Ndeze (2) The PCS Group shows that this may not always be the case.
In this case, the London Borough of Waltham Forest owned land on which a business centre was leased. The business centre was managed by Workspace Plc which contracted with PCS to provide security services. The Borough subsequently took over the management of the business centre and appointed a new security company, Horizon, to look after the site for the 8 to 9 month period before the Borough had the site demolished. Employees working for PCS claimed that this amounted to a TUPE transfer and argued that their employment should have transferred to Horizon. The EAT disagreed, finding that two fundamental principles, as follows, meant that there was no TUPE transfer:
- TUPE only applies where the client for whom the transferring services are provided remains the same. In this case, the identity of the client changed from Workspace Plc to the London Borough of Waltham Forest.
- TUPE does not apply where the activities are carried out in connection with a single specific event or a task of short duration. The EAT decided that, because Horizon's contract was only for a period of 8 to 9 months, this was a task of short duration.
Because one generally assumes that TUPE will apply when a contract is passed from one contractor to another it is easy to overlook the need to analyse each particular set of circumstances. Whenever you are bidding (or indeed in danger of losing) a contract think about whether any of the exceptions that might mean that TUPE won’t apply could be applicable – such as was the case here or for example where the nature of the services being provided is being changed to a fundamental degree or where there is not a suitably organised grouping of employees carrying out the services.