TUPE: tribunal entitled to find an organised grouping in service provision change between temporary work agencies

Background

In the case of Mach Recruitment Ltd v Oliveira, Mrs Oliveira worked through a temporary work agency as part of a team carrying out the same role for a single client. She later became employed by a different agency, which went on to take over supplying workers to that client.

Under TUPE’s service provision change rules, one requirement is that, immediately before the change, there is an 'organised grouping' of employees whose principal purpose is carrying out the activities for that client.

The claimant said this requirement was met, so her employment should have transferred to the new agency. The new agency disagreed, arguing there was no deliberately created group dedicated to the client and that any such arrangement was simply a coincidence. The tribunal was asked to decide whether an organised grouping existed.

The tribunal found that the first agency did have an organised grouping of employees whose main purpose was providing workers to the client, and that this was more than just a coincidental arrangement. As a result, it held that there had been a service provision change and that the claimant’s employment had transferred to the new agency. The new agency appealed.

The EAT’s decision

On appeal, Mach argued there was insufficient evidence of an organised grouping. Reviewing the relevant case law, the EAT emphasised that deciding whether a service provision change has occurred should be a straightforward process of reasoning.
In this case, limited evidence existed before the tribunal. However, Mach had not called evidence to show there was no organised grouping. The tribunal had accepted that Mrs Oliveira was part of a settled group of employees, placed at a specific location to do specific work for a single client. This arrangement was found to be the result of a conscious organisational decision and more than mere coincidence. While another judge might have reached a different conclusion, the decision was not perverse and was upheld.

Learning points for employers

This case underlines the importance of retaining clear evidence about how staff are organised in relation to particular contracts or clients. That evidence may need to show either that an organised grouping exists or that no such grouping is in place. In this instance, the incoming agency had not provided any evidence from which it could be inferred that no organised grouping existed, which was a significant factor in the tribunal’s findings being upheld.

It should also be noted that where agency workers are not employees of the agency, they will not be covered by TUPE’s automatic transfer principle, even if they form part of the team delivering the service.

For more information or advice, please contact Alastair Fatemi in our Employment team.