Labour & European Law Review Weekly Issue 454 27 January 2016
There is a “service provision change” under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) when activities which were being carried out by one contractor are carried out instead by another, unless the client intends the “task” to be short term. In ICTS UK Ltd v Mahdi and ors, the Employment Appeal Tribunal (EAT) held that tribunals can look at events after the transfer to ascertain the client’s intention.
ICTS had provided the security at Trent Park Campus for Middlesex University until it was closed down in 2012. The company continued to provide security services at the vacant site until it was bought by a Malaysian organisation called AUCMS in July 2013. ICTS was informed in October that another security company, First Call, would be taking over the contract from 11 November 2013. First Call wrote to ICTS on 8 November saying that TUPE did not apply because, after the campus was sold, ICTS had provided limited security “for short-term duration”, the exception stipulated in Regulation 3(3)(a)(ii).
When the claimants lodged claims of unfair dismissal against both companies, First Call argued again that there was no TUPE transfer and therefore it was not liable. The contract which it won was not to provide security for an operating university campus, but to secure what was to become a building site, requiring completely different security requirements. In addition the contract was only initially for a fixed period of three months and after that only until the refurbishment of the site was complete.
Regulation 3(3)(a)(ii) states that there is a service provision change (SPC) when activities which were being carried out by one contractor are carried out instead by another contractor and immediately before the SPC, “the client intends that the activities will … be carried out by the transferee otherwise than in connection with a … task of short-term duration …”
The tribunal accepted that the activities carried on by ICTS and First Call at the site before and after 11 November 2013 were substantially the same and that the client remained the same. That meant that TUPE applied unless the condition under Regulation 3(3)(a)(ii) was engaged.
As AUCMS clearly intended either to redevelop the site or re-open the campus, the security operation both before and after the transfer constituted a “short-term task” and the condition in Regulation 3(3)(a)(ii) was not satisfied, as First Call had argued in their letter of 8 November. As TUPE did not apply, the claimants’ contracts did not transfer to First Call but remained with ICTS.
ICTS appealed on the basis that the judge should have taken into account evidence showing that, at the time of the hearing, AUCMS had not obtained planning permission for any significant building work and none had taken place throwing doubt on the claim that the task was “short-term”.
The EAT allowed the appeal on the basis that the judge should have taken into account events following 11 November as these were relevant when deciding the client’s intention.
The finding that no planning permission had been obtained and no building works carried out as at August 2014 cast doubt on what First Call had argued in their letter of 8 November 2013. It also raised questions about whether AUCMS had intended that the “task” would be “of short-term duration” or whether it was more of a “hope and wish” that it would be. The judge’s failure to take this evidence into account was an error of law.
In those circumstances the EAT allowed the appeal and remitted the matter to the tribunal to reconsider its decision.