Holistic transfer

For a service provision change to take place under the Transfer of Undertakings (Protection of Employment) Regulations 2006, the “activities” pre and post-transfer have to remain essentially the same. In Johnson Controls v UK Atomic Energy Authority, the Employment Appeal Tribunal (EAT) said that tribunals must carry out a holistic assessment in order to decide whether they have or not.

Basic facts

The United Kingdom Atomic Energy Authority (UKAEA) had historically used a centralised, outsourced taxi booking service, provided by Johnson Controls, which was administered by one of Johnson’s employees, Mr Campbell.

In order to reduce costs, the UKAEA decided in 2010 that its own secretaries would book taxis directly with the taxi firms, and discontinued the contract with Johnson.

The question arose as to whether there had been a service provision change from Johnson Controls to the UKAEA of Mr Campbell’s employment. This required the service to remain fundamentally or essentially the same following the purported transfer.

Relevant law

Regulation 3(1)(b) states that: “activities cease to be carried out by a contractor or a subsequent contractor on a client's behalf ... and are carried out instead by the client on his own behalf”, as long as certain conditions apply.

These include the requirement that: “(i) there is an organised grouping of employees ... which has as its principal purpose the carrying out of the activities concerned on behalf of the client, and that (ii) the client intends that the activities will, following the service provision change, be carried out by the transferee ...”.

Case law has established that, when deciding whether there has been a service provision change, tribunals have to decide whether the “activities” remained fundamentally or essentially the same pre and post-transfer.

Tribunal decision

The tribunal judge held that, although the service remained substantially the same after the change (UKAEA was still booking taxis), there was a crucial difference in that it was no longer a centralised service.

The judge also identified other differences before and after the termination of the contract including arrangements for processing passenger questionnaires, processing complaints and maintaining a database.

The tribunal concluded therefore that the activity before the change was not essentially the same activity after the transfer and TUPE did not apply.

EAT decision

The EAT upheld this decision, saying that the activities being carried out by the secretaries were not the same as those carried out by Mr Campbell.

It said that identifying an activity required a “holistic assessment” by tribunals and that they should be trusted to carry that out. It added, however, that tribunals should not do so by undertaking a process of “enumerating tasks” and then deciding whether most of them were the same pre- and post-transfer.

It also said that tribunals should recognise that the same activity can happen before and after the transfer even if three people are doing afterwards what one person did beforehand, as in this case.