In ICTS UK Ltd v Mahdi and others UKEAT/0133/15 the Employment Appeal Tribunal (EAT) was asked to consider whether an employment tribunal (ET) should take into account events following an alleged service provision change under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) where it was alleged that the client intended the activities to be in connection with a "task of short-term duration".
ICTS provided security services at a former Middlesex University site called Trent Park Campus. Following the sale of the site to a Malaysian organisation called AUCMS in 2013, ICTS continued to provide security services. In October 2013 AUCMS informed ICTS that a new security company (First Call Security) was being appointed and would provide security services with effect from 11 November 2013.
The question arose whether TUPE would apply to transfer the employment of the 10 security guards employed by ICTS and who provided the security services to AUCMS. The new security provider refused to accept the staff of the pre-existing security provider on the grounds that the activities that the client intended to be carried out were in connection with a "single specific event or task of short-term duration". The reasoning was that AUCMS had appointed First Call on a temporary 'caretaker' basis, as it intended to redevelop the site and the construction company would appoint its own security guards once the redevelopment commenced. In a letter to ICTS from First Call, it was suggested that the redevelopment would commence within a few weeks.
In consequence of the above, the claimants lost their jobs on 11 November 2013 and brought claims against both ICTS and First Call.
First Call submitted a response that stated that (1) AUCMS planned to redevelop the site with a multi-million pound construction and renovation scheme, (2) the contract which went to tender was materially different from that under which ICTS provided services, (3) First Call had entered into a contract dated 21 October 2013 with a company called Castlefields Global Ltd who were contracted to manage the refurbishment and (4) the contract was to provide security services for a three month period and thereafter until completion of the refurbishment. First Call did not appear at the ET hearing. At the date of the hearing, planning permission had not been granted for any significant building at the site and building work had not commenced.
Employment tribunal decision
The ET found that the activities carried out by ICTS were substantially the same as those activities carried on by First Call, meaning that TUPE applied unless the activities would be carried out by First Call "in connection with a…task of short-term duration." The ET judge found that the exception did apply and that therefore TUPE did not operate to transfer the employment of the claimants to First Call. In reaching his decision that TUPE did not apply on the grounds that the above exception applied, the ET judge limited his consideration to the intentions of the parties at the date of the alleged transfer.
The decision was appealed on a number of grounds, including that the judge was wrong to wholly ignore events occurring after 11 November 2013.
The EAT upheld the appeals and remitted the case back to the ET for further reconsideration on the grounds that the judge had erred in limiting his consideration of the intention of the parties to a specific date. The EAT held that in deciding a question of fact it is almost invariably necessary for an ET to draw an inference from all the relevant surrounding circumstances presented to it and that such circumstances can include contemporaneous expressions of intent and actions by the relevant parties but they can also include what the party says or does not say after the relevant event.
The EAT judge expressed his view that there was no reason why consideration cannot also include subsequent events (or non-events), provided of course that those events are capable of casting light on the intention of the relevant party at the relevant date and that the fact-finder bears in mind that the ultimate issue to be decided is intention and not outcome.
This case is a reminder that the intention of the parties in these types of cases is not only relevant but key. Further it confirms that the ET is at liberty to consider evidence from after the alleged transfer pertaining to what was discussed, documented or done by the parties insofar as it has a bearing on establishing what the client's intentions were. However, a distinction must be drawn between evaluating the client's intention by reference to the ultimate outcome as at the hearing date (which is likely to give rise to an error of law) and using post-transfer events to cast light on the intention of the relevant party at the relevant time.