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TUPE – Identifying activities in SPC
In Qlog Limited v O’Brien and others, the EAT had upheld an Employment Tribunal decision that the activities carried out by the incoming service provider were fundamentally or essentially the same as those carried out by the outgoing service provide for the purposes of the service provision change under TUPE. The EAT held that, in coming to its decision, the Tribunal was entitled to take account of the description of the activities in the contractual documentation, which confirmed that, under the contract, the incoming provider was required to provide the same services as the outgoing provider. However there is slightly more to this case than meets the eye in terms of the facts.
The company, Ribble contracted with McCarthy Haulage Limited for the latter to transport and deliver Ribble goods from its premises to destinations in the UK mainland. When the contract was terminated, Ribble chose a new provider, Qlog Limited. However this company does not provide the transport services but operates as a middle man between the clients and the haulage providers. Under the TUPE transfer which took place, Qlog agreed that the shunters and transport manager would transfer under TUPE as they were associated with the warehousing aspect of the service, which Qlog provided directly. However Qlog did not provide transport services itself but instead outsourced these to another organisation and therefore contended there was no TUPE transfer in respect of the drivers. Effectively it sub-contracted the actual transport and therefore contended that TUPE did not apply (notwithstanding that a TUPE transfer may take place via one or more transactions).
Because of the fact that the contractual documentation between Ribble and Qlog clearly stated that the activities which had previously been carried out would continue to be carried out going forward, TUPE was deemed to apply in respect of the sub-contractors when the drivers, who were dismissed by McCarthy when not transferring to Qlog, brought Employment Tribunal proceedings. The EAT considered that the Tribunal had correctly focused on the core of the activity being undertaken rather than the different modes of the way in which it was operated: the activities carried out pre-transfer continued to be carried out post transfer and therefore TUPE applied. The incoming provider in this case took responsibility for the entirety of the work, even though it did not itself undertake to transport the goods but instead outsourced this function.
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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