Dudley Bower Building Services Limited v Lowe [2003] IRLR 260 (EAT)
Fairhurst Ward Abbotts Ltd v Botes Building Ltd and others, Times Law Report 16/4/03 (EAT)

Cases on the scope of TUPE protection are much rarer now than in the heyday of the 1990s, but two recent cases confirm the breadth of the legislation's coverage.

Mr Lowe was one of four employees carrying out electrical and mechanical maintenance and repairing duties. The work was organised into packages and Mr Lowe was responsible for a particular package. Work (including the packages of work) was contracted out. A contractor won the contract which included Mr Lowe's package of work. The contractor then subcontracted Mr Lowe's package of work to another company, DBB. DBB did not take on Mr Lowe, but instead employed someone else who spent 90 per cent of his time carrying out the work which Mr Lowe had previously done.

Mr Lowe argued that TUPE applied and that he should have transferred. The Employment Tribunal agreed, concluding that the package of work performed by Mr Lowe was a distinct part of the undertaking and amounted to a stable economic entity even though there was only one employee carrying out the work.

The EAT agreed. Work which is carried out by only one employee is capable of being a stable economic entity that can be transferred. There is no reason why work performed by one individual should not amount to a part of an undertaking. In deciding this, the EAT reaffirmed the correctness of the European Court of Justice decision in Schmidt in 1994. That case concerned an operation carried out by one cleaner. It is encouraging that the EAT emphasised that this remains the case despite the more restrictive approach taken in the subsequent ECJ case of Suzen. The EAT stresses that Suzen does not overrule or even disapprove Schmidt.

The EAT stressed that all factors must be considered: the workforce, the management of staff, the way in which the work is organised, the operating methods and the operational resources. There must also be consideration of the extent to which the operation is structured and autonomous. The EAT observed that, where the task to be performed is complex and sophisticated and requires careful planning, specification and costings, it may be that a stable economic entity exists even though there is only one employee. This is undoubtedly right, but it is unfortunate that the EAT then goes on to contrast this with a situation with "no more than one cleaning lady and her mop". It would be unfortunate if this largely helpful decision is seen as making it more difficult to succeed in cases where the jobs of more vulnerable workers are transferred.

The Fairhurst Ward Abbotts Ltd v Botes Building Ltd and others case also concerned the packaging of work, but in a rather different context. Fairhurst Ward Abbotts ceased to carry out work previously operated by them. It continued in the hands of others, but was split into a number of parts, some of which were taken over by Botes Building Ltd. 
The EAT concluded that dividing up the business into parts, all of which transferred, albeit to a number of different companies, did not prevent TUPE applying. The EAT took the view that the protection to the transfer of a part of an undertaking did not necessarily require that the part transferred was of itself a separate economic entity before transfer.

While the need for protection must be paramount and the result prevents unscrupulous employers defeating TUPE by splitting up business, it may be that the reasoning is rather over-ambitious and that it is necessary to show a distinct part of the undertaking at the point of transfer. This may of course arise from the manner in which the employer divides up the work on, or in anticipation of, the transfer.