For a service provision change to occur under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), there has to be “an organised grouping of employees” whose main purpose is to carry out a client’s “activities”. In Ceva Freight (UK) Ltd v Seawell Ltd, the Court of Session held that although a single employee could constitute an “organised grouping”, the definition did not apply if the activities were carried out by a number of employees.

Basic facts

Mr Moffat worked as a logistics co-ordinator for Ceva which provided freight forwarding and management logistics to companies, including Seawell, a platform drilling business.

The Seawell contract involved an “inbound” and “outbound” operation.

Mr Moffat spent 100 per cent of his time on the outbound part of the contract. Other staff also worked on it but worked for other contracts at the same time. When Seawell ended the contract in January 2010 and took the work back “in house”, Ceva told Mr Moffat that his employment had transferred over to Seawell under TUPE, which it denied.

He brought unfair dismissal claims against both companies.

Tribunal and EAT decisions

The tribunal held that Seawell was carrying out the same activities after January 2010 that Ceva had carried out before that date. As an “organised grouping” could be made up of just one employee and as Mr Moffat’s principal purpose was carrying out “the activities concerned”, TUPE applied. It therefore upheld his claim of unfair dismissal.

The EAT, however, disagreed. It said that the phrase “organised grouping” required a situation where employees were deliberately brought together for the purpose of the client’s work and did not apply in circumstances where employees just happened to end up working mostly on tasks that benefitted a particular client.

When Seawell took the contract back in-house, it took over all aspects of the work. That included the work that had been done by the other employees as well as those duties that Mr Moffat had undertaken.

Decision of Court of Session

The starting point, said the Court of Session (the Scottish equivalent of the Court of Appeal), was to look first at the scope and nature of the “activities” and then consider how they were carried out. The next step was to identify whether the employees had been grouped into a “conscious organisation” whose main purpose was to carry out the activities.

In this case, the activities involved both "outbound" and "inbound" operations which were carried out by a number of employees, not just Mr Moffat. Since most of them did similar tasks for other clients, they could not be described as an organised grouping whose principal purpose was to carry out activities for Seawell,
Given the structure and wording of the regulations, it was not valid to isolate one employee just because that individual devoted most of their working time to assist in what was, in reality, a collaborative effort.

Although Mr Moffat’s job description indicated that he was employed to facilitate the contract with Seawell, that did not mean he could be distinguished from an employee who was one of a number carrying out the activities and who contributed most of their working time to carrying them out.

The definition of an organised grouping certainly could include a single employee (for example, the needs of a client of a cleaning firm might be for a single cleaner), but that definition did not apply when the activities were carried out by a number of employees.
The reference to a single employee in this case did not “warrant disaggregation of that group”.