Will There Still be a Service Provision Change under TUPE Where Only Part of the Activities Transfer?
Potentially, yes, said the Employment Appeal Tribunal in the case of Arch Initiatives v Greater Manchester West Mental Health NHS Foundation Trust & or.
This case will be of particular interest to those organisations involved in retendering exercises and contractors that take over the provision of services from outgoing contactors.
Background
Bolton Council retendered the way in which it dealt with the alcohol and drug care across its region. Up until 31 December 2012, the services had been carried out by Greater Manchester West Mental Health NHS Foundation Trust (the NHS Trust) on Bolton Council's behalf. As part of the retender, Bolton Council decided to split the services that were being performed by the NHS Trust into two functions, consisting of case management services and delivery of interventions.
Different entities were awarded the different functions - Arch Initiatives (Arch) was awarded the case management function and Lifeline Project Ltd (Lifeline) was awarded the delivery of interventions function.
The NHS Trust employees who had previously been performing the case management services pursued unfair dismissal claims at the Employment Tribunal (ET), arguing that their employment had transferred to Arch on 1 January 2013 in accordance with the TUPE regulations.
Arch argued that there had been no TUPE transfer, saying that in order for there to be a service provision change, the activities performed pre and post transfer must be 'fundamentally or essentially' the same. Arch argued the activities were now different - whereas the NHS Trust had been carrying out both service functions, Arch and Lifeline were both separately carrying out one function each.
The ET found that there had been a service provision change on 1 January 2013 from the NHS Trust to Arch, and that there were two organised groupings of employees assigned to each function who would separately transfer to the new provider. Arch appealed against this decision.
The Employment Appeal Tribunal's (EAT) Decision
The EAT upheld the ET's decision, finding that the word 'activities' was not qualified or restricted in any way. The EAT was satisfied that there was nothing in TUPE that said the relevant activities should constitute 'all of the activities' carried out by the outgoing contractor. The fact that the function lines were now split, did not of itself mean that the activities being performed post transfer were not the same as the activities performed pre transfer.
Best Practice
As with many TUPE cases, this decision did turn on the specific facts of the case. It is, however, a good reminder that incoming contractors may still be caught by the TUPE rules when taking over a contract even if they are not taking over the entirety of the contract, or are only taking on a particular service line following a retendering process.