Under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), there cannot be a service provision change when the activities that have been contracted out are “in connection with a single specific event or task of short-term duration”. In Liddell’s Coaches v Cook and ors, the Employment Appeal Tribunal (EAT) said that the phrase “single specific event” stood alone and the use of “short term duration” was therefore superfluous.
Mr Cook worked as a driver for Liddell’s which provided school transport services for local authorities. In August 2010 it successfully tendered for five contracts to transport children from Gargieston primary school in East Ayrshire to other schools in the area while theirs was being rebuilt. The five contracts were for a period of one year each. This was unusual in that most transport contracts were for four or five years each.
Liddell’s applied again in 2011 for the contracts but was only successful in winning one of them. Another contractor, Abbey, won three. Liddell’s terminated Mr Cook’s contract in July 2011 on the basis that his employment would transfer over to Abbey under the TUPE service provision change rules. Abbey, however, said Mr Cook was not their employee. He brought unfair dismissal proceedings.
Regulation 3(1)(b) of TUPE states that there is a service provision change (SPC) when an organisation engages a contractor to provide a service on its behalf or brings the service back in-house and certain other conditions are satisfied.
Regulation 3(3)(a)(ii) states that there is no service provision change if the activities that have been contracted out are “in connection with a single specific event or task of short-term duration”.
Relying on guidance from the government, the tribunal interpreted regulation 3(3)(a)(ii) as disapplying TUPE where the “activities” contracted out constitute a “single specific event” and that task is also “of short term duration”.
As the contract related to a single specific event (the rebuilding of the primary school) and was of short term duration (lasting only one year rather than the usual four or five years for transport contracts), there had not been a service provision change under regulation 3. It therefore upheld Mr Cook’s claim of unfair dismissal against Liddell’s.
The EAT dismissed Liddell’s appeal. Although it was critical of the tribunal’s failure to look at whether the other elements of regulation 3 were satisfied, it agreed with their conclusions.
The government’s guidance indicated that there would be a service provision change when activities connected .to a single specific event were nonetheless of long term duration. However, although this approach had been endorsed in SNR Denton UK LLP v Kirwan and anor (see weekly LELR 302), the EAT in this case was not convinced that both elements had to be present.
In its view, the term “single specific event” stood alone. It was “a single happening or occurrence ... involving a qualitative or quantitative change or complex of changes located in a restricted portion of time”. In addition, as the word “event” indicated something of short duration, there had been no need for the draughtsman to apply the phrase “of short term duration” to “single specific event”.
The EAT said that the government’s guidance had conflated “activities” and “event”, adding that ‘”the fact that activities carried out in connection with an event are to be long term does not make the event itself long term”.
The tribunal was right, though, to find that the contract was in connection with a task of short term duration as it was only for a year when most transport contracts lasted considerably longer.
The EAT granted the company leave to appeal to the Court of Session.