TUPE update

We take a look at some recent cases on this area around service provision changes.

The definition of Service Provision Change (SPC) is found at Regulation 3(1)(b) of TUPE and is as follows:

(i) activities cease to be carried out by a person (“a client”) on his own behalf and are carried out instead by another person on the client’s behalf (“a contractor”);

(ii) activities cease to be carried out by a contractor on a client’s behalf (whether or not those activities had previously been carried out by the client on his own behalf) and are carried out instead by another person (“a subsequent contractor”) on the client’s behalf; or

(iii) activities cease to be carried out by a contractor or a subsequent contractor on a client’s behalf (whether or not those activities had previously been carried out by the client on his own behalf) and are carried out instead by the client on his own behalf,

Further conditions are:

“Contractor” for these purposes includes subcontractors.

The “activities” that are carried out by another person must be activities which are fundamentally the same as the activities carried out by the person who has ceased to carry them out.

Salvation Army Trustee Company v Bahi and others

This is a SPC case (see (ii) above) where CCL (a charity) contracted with Coventry City Council to provide accommodation based support for the homeless with the aim of finding them private, more permanent accommodation.

The Council decided to merge this with ex-offender support and the new contract was awarded to the Salvation Army (SA).

The provision of service differed slightly but the judge found that the “activities” that were carried out by the new contractor (SA) were “fundamentally the same” as the activities carried out by CCL. Therefore there was a TUPE transfer.

It is difficult to sometimes assess on the particular facts of each case whether the activities are fundamentally the same so as to fall under the definition of a SPC. The Employment Appeal Tribunal (EAT) found that the employment judge had taken the correct approach, steering “a correct course between the twin dangers of overgeneralisation and pedantry”.

Further conditions for a SPC are:

• Immediately before the change, there must be an organised grouping of employees situated in Great Britain that has as its principal purpose the carrying out of the relevant activities on behalf of the client. The organised grouping of employees could be a single employee.
• The activities will be carried out by the transferee other than in connection with a single specific event or task of short-term duration
• The activities do not consist wholly or mainly of the supply of goods for the client’s use

Tees Esk & Wear Valleys NHS Foundation Trust v Harland and others

The EAT has given guidance on the determination of the “principal purpose” of an organised grouping of employees within the meaning of a SPC.

This case concerned the care of an individual with severe learning difficulties, initially requiring a team of 27 people. This number reduced as the individual required less care and by the time of the alleged transfer it was claimed there were just 11 people caring for him.

The tribunal found that since those 11 people also cared for other people the principle purpose had been diluted – the purpose was no longer the provision of care to the same individual.

The principal purpose of an organised grouping will always be dependant on its own facts and may change over time. An employer may organise a grouping with a particular intention, but it is still permissible for an employment tribunal to consider the activities actually carried out by that grouping immediately before an alleged transfer. The activities actually performed may be relevant, just like the intention of the employer.

Since many TUPE cases are very fact specific, it is advisable to seek advice early on to help avoid issues with any transfer. If you would like any advice on this topic, or any other employment law topic, then please contact us on 01730 268211 or at

N.B. Please note that the above information is a guide only and does not constitute legal advice. We recommend seeking specialist legal advice on your own particular circumstances