September 5, 2013

Reduced activities post transfer service provision change

In 2005 the council outsourced a specific activity which it was obliged to run under the Children Act for children in care to an organisation called CSV which specialised in the provision of community service volunteers. In 2011 negotiations between the council and CSV for renewal of the contract broke down, with the result that the Claimant was made redundant. The council took back the activities in-house but only undertook some of them and dropped others completely. The Claimant then brought an unfair dismissal claim alleging that she had been automatically unfairly dismissed under TUPE and that she should have transferred because the services were continuing. The preliminary issue before the Tribunal in the first instance was whether there was a service provision change.

The Employment Judge concluded that there was a service provision change because the council was continuing activities which had previously been carried out by CSV on its behalf, even though some of the activities were discontinued. In the view of the Judge, there was sufficient continuity of most of the activities to mean that a service provision change had taken place. The council appealed to the EAT which upheld the Tribunal decision.

As readers will be aware, the government is proposing to abolish the service provision change provisions completely. A consultation on this proposal brought out both the Law Society and the ELA against the suggestion, and research by DAC Beachcroft indicated that 75% of its clients, from large to small and from public to private sector, concluded that amendment would be preferable to outright abolition. Whether the Government will listen to this remains to be seen.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222

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