Labour & European Law Review Weekly Issue 353 22 January 2014
There cannot be a service provision change under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) 2006 if the activities to be carried out by the transferee, after the change, are connected with a single event or task of short term duration. In Swanbridge Hire & Sales Ltd v Butler and ors, the Employment Appeal Tribunal (EAT) held that the phrase “of short term duration” applied to both events and tasks.
Thompsons was instructed by Unite the Union to act on behalf of its members in respect of a potential protective award claim.
Kitsons was subcontracted by Shaw Group Ltd to insulate and clad five boilers as part of major works that were ongoing at Pembroke Power Station. The company started work on boilers one to three on 4 January 2011 but things did not work out and in September, Shaws informed Kitsons that another company, Swanbridge, would take over the work on boilers four and five.
On 5 October Shaws wrote again to Kitsons informing them that it was terminating the whole contract covering all five boilers. By this stage 80 per cent of the work had been completed on boilers one to three, but virtually no work had been done on the other two. Swanbridge completed the work on all five by late May/early June 2012. The project had therefore taken about 18 months in total, with Swanbridge undertaking about eight months of the work.
A number of employees who worked for Kitsons brought claims for notice pay, outstanding wages, holiday pay, bonuses and expenses. The unions brought claims for a protective award. Kitsons argued that as TUPE applied, Swanbridge was liable. Swanbridge argued that the work fell within the “short term duration” exception and so TUPE did not apply.
Under Reg 3 (3) (a) (ii) of TUPE 2006 there cannot be a service provision change if “the client intends that the activities will, following the change, be carried out by the transferee other than in connection with a single specific event or task of short term duration”.
The employment judge held that the work done on the five boilers was not a “single event of short term duration’, not least because the contract was lengthy and protracted. Although the work could be viewed as a single event, it could not be regarded as short-term as it took 18 months to complete and represented eight months of work for Swanbridge alone.
There was therefore a service provision change and TUPE applied.
EAT decision of Court of Appeal
The EAT however, disagreed, holding that the first thing the tribunal should have done was to ascertain how long Shaws intended that it would take Swanbridge to complete the work when it gave the contract to them. Even if that was not expressly stated anywhere, the tribunal should have inferred it from the available evidence.
Nor had it identified the correct “single event” as the work carried out on the boilers was a task, not an event. It had also failed to look at whether Shaws intended the activities to be carried out in connection with a task or event of short-term duration (as opposed to whether the activities were short-term).
In this case, the activities were in connection with the task of completing work on boilers one to three and undertaking all the work on boilers four and five. In other words, the remaining work, not how long it had taken to do the work as a whole.
Although it was not necessary to decide whether the phrase “of short-term duration” applied to “events” as well as “tasks”, it agreed with the EAT in SNR Denton v Girvan that it covered both.
The EAT remitted the case to another employment judge to reconsider the issues.