The EAT held in OCS Group UK Ltd v Jones and another that there was no service provision change under TUPE 2006 where a re-tendering of a contract for catering services resulted in "wholly different" activities being carried out by the incoming contractor.
OCS operated a service contract for the provision of catering services, under which it was required to provide a variety of hot and cold food throughout the day. Negotiations to renew the contract were unsuccessful and another catering company took over as service provider. However, the new contractor was asked to provide kiosks selling pre-prepared sandwiches and salads, rather than hot food. Whereas most of OCS's staff had been chefs involved in the preparation of food, the new contractor employed mainly sales assistants.
The EAT agreed with the tribunal that there had been no service provision change because the activities carried out under the new contract were materially different. It held that although the activities did not have to be identical for a service provision change to occur, they did need to be "fundamentally and essentially the same".
Impact on employers
This decision follows another case earlier this year (Metropolitan Resources Ltd v Churchill) that came to a similar conclusion. Whether or not a service provision change has occurred will depend upon the employment tribunal's assessment of the facts, which will be difficult to overturn on appeal if they have approached the question in the right way.
The EAT's reasoning here suggests that "activities" may have a narrower meaning than "service" in a TUPE context and much will therefore depend on how the activities and the service in question are defined in the contractual documents entered into by the parties. There will at times be a fine distinction to be drawn in determining whether the core activities have remained sufficiently similar on a change in contractor to amount to a service provision change.
Clearly, there is scope to use the decisions in this case and in Metropolitan Resources Ltd v Churchill to seek to avoid TUPE by redefining the activities within a broadly similar service or by entirely rescoping the services. A legitimate change to activities may escape TUPE but changes that are for appearance's sake only may be seen through by employment tribunals as a sham.