The Court of Appeal has held in McCarrick v Hunter [2012] EWCA Civ 1399 that the identity of the client for whom services are provided must remain the same before and after a change of service provider for there to be a "service provision change" within the meaning of TUPE.

Mr McCarrick was employed by WCP to manage a portfolio of properties.  Receivers were appointed in August 2009 and took over ownership of the properties as well as appointing a new management company to replace WCP.  At that time, Mr McCarrick did not transfer to the new management company and instead accepted employment with his old manager Mr Hunter, although he still assisted the new property management company in managing the properties. Mr McCarrick was then dismissed and claimed unfair dismissal.  A key question in the case was whether Mr McCarrick had transferred under TUPE from WCP to Mr Hunter and therefore had sufficient continuity of service to bring a claim.  The Court of Appeal held that TUPE did not apply; Regulation 3(1)(b)(ii) of TUPE states that a "service provision change" occurs where activities cease to be carried out "on a client's behalf"  and are, instead, carried out by a subsequent contractor "on the client's behalf". The Court of Appeal held that this should be read as meaning activities for the same client. In this case, when the receiver had been appointed the properties had changed hands and so the client was not the same.  There was therefore no service provision change.

While this is not new law, it does highlight the importance of applying TUPE carefully to the facts of each case.  It is also reassuring that the court did not feel it necessary to give a purposive approach to TUPE as this would open up the floodgates to TUPE applying in a far wider range of circumstances.