Different or the same?
Labour & European Law Review Weekly Issue 496 16 November 2016
There is a service provision change (SPC) under TUPE when “activities” which used to be carried out by one contractor are carried out by another contractor, and they remain “fundamentally the same”. In The Salvation Army Trustee Company v Bahi and ors, the Employment Appeal Tribunal (EAT) held that it is not an error of law for a judge to define “activities” in terms of their difference as opposed to their similarities.
A charity called CCL provided a range of services to the homeless in Coventry under a contract with the Council. Four of its Adult Services Team worked almost exclusively on two contracts providing accommodation-based support for men and women in ten houses of multiple occupation at different locations in Coventry.
After deciding to rationalise the different contracts it had with different providers and merge them into one point of access for providing support to the homeless, the Council awarded the contract to the Salvation Army.
There were a number of “activities” which it carried out differently from CCL. For instance, it provided supported accommodation in two large hostels, rather than 10 houses; It restricted the service to those over 25 rather than over the age of 18; and it reduced the maximum period over which it provided accommodation from two years to 112 days. Finally, their support workers operated from 7am to 7pm while CCL workers did normal office hours.
The Salvation Army said that as the activities were not “fundamentally the same” there was no SPC. The four members of CCL’s Adult Services Team lodged claims of automatically unfair dismissal under TUPE (Transfer of Undertakings (Protection of Employment) Regulations) 2006.
The employment judge held that the key issue to decide was whether the activities that had been carried out by CCL were “fundamentally the same” as those carried out subsequently by the Salvation Army on behalf of Coventry City Council.
He held that as the activities were “the provision of accommodation based support for homeless men and women” under each contract, there had been an SPC from CCL to the Salvation Army.
The Salvation Army appealed, arguing that the judge should have defined the activities as “the provision of long-term dispersed accommodation based support for homeless men and women”.
In order to give “activities” in Regulation 3(1)(b) TUPE their ordinary, everyday meaning, the EAT held they should be defined in a “commonsense and pragmatic way”, as opposed to “a pedantic and excessively detailed” way. Although there were differences between the two contracts, the EAT was satisfied that the tribunal judge had steered a correct course between “the twin dangers of overgeneralisation and pedantry” when comparing them.
The EAT also rejected the Salvation Army’s argument that the judge was obliged to find the activities were limited to the long-term, not least because many service users were moved on relatively quickly, and the expectation was that they would be moved on within 180 days.
Nor was he obliged to define an “activity” by reference to the locations where it was carried out, as the Council’s contract permitted the activity to be carried out either in the existing houses of multiple occupancy or at some different location or locations. The support continued. It did not dissipate because the houses of multiple occupancy were no longer in use.
And although the judge had asked whether there were fundamental differences between the two contracts as opposed to whether they were fundamentally the same, the EAT held that this was not an error of law as he had used them in direct opposition to each other.
The EAT therefore dismissed the appeal.
This case highlights a common problem that parties face when defining “activities” before and after a change of service provider. The EAT commented on a judicial concern that these fact-sensitive cases should not be litigated if an alternative speedy dispute resolution procedure could be followed instead. The President of the Employment Tribunals issued a Protocol for Judicial Assessment on 3 October 2016, and it should be expected that it may be used for exactly this type of case in future.