Hunter v McCarrick

For a service provision change under regulation 3(1)(b)(ii) of the Transfer of Undertakings (Protection of Employment) Regulations 2006, the activities must be carried out by different contractors for the same client. A change of both contractor and client does not satisfy the provision. The statutory language is to be applied according to its ordinary meaning; there is no warrant for extending client to include any client or multiple clients. The conditions in regulation 3(3)(a), including the client’s intention concerning short-term tasks, must also be considered. A service provision change does not arise merely because an organised group of employees continues the same activities. The appeal was therefore allowed.

The Employment Tribunal decided at a pre-hearing review that Mr McCarrick’s employment had transferred to Mr Hunter under TUPE, giving him sufficient continuity of employment to pursue an unfair dismissal claim. The tribunal treated changes in property-management arrangements in February and August 2009 as service provision changes under regulation 3(1)(b).

The August change followed the appointment by Aviva Commercial Finance Ltd of receivers over properties previously managed for the Waterbridge Group. The issue was whether a service provision change could occur where both the contractor and the client had changed, and whether the tribunal had properly considered the conditions in regulation 3(3)(a)(ii).

1. Appeal allowed. The finding that Mr McCarrick’s employment transferred to Mr Hunter in August 2009 was set aside. A finding was substituted that the employment did not transfer pursuant to TUPE.

2. Regulation 3(1)(b) introduced a distinct statutory concept directed to outsourcing, changes between contractors and insourcing. Following Metropolitan Resources Ltd v Churchill Dulwich Ltd [2009] IRLR 700, the provision should be applied by giving its words their ordinary meaning. A purposive extension is unnecessary.

3. In regulation 3(1)(b)(ii), “the client” refers back to the specific client for whom the transferor contractor carried out the activities. The same client must exist before and after the change of contractor. The use of the definite article, and the corresponding wording in regulation 3(1)(b)(i) and (iii), supported that construction.

4. The August arrangement involved a change from activities performed for the Waterbridge Group to activities performed for Aviva and the receivers. It therefore could not be a service provision change under regulation 3(1)(b).

5. A transfer under regulation 3(1)(a) could theoretically arise where services were provided to different clients, applying the ordinary multi-factorial approach. However, the facts relied on here showed only the movement of an organised group of workers carrying out property-management activities. They were insufficient to establish a transfer of an economic entity retaining its identity.

6. The conditions in regulation 3(3)(a) are cumulative requirements for a service provision change. Regulation 3(3)(a)(ii) required findings about the intention of the relevant client immediately before the alleged transfer, including whether the activities were intended to continue otherwise than in connection with a single specific event or task of short-term duration. The Employment Tribunal made no such finding. This provided an alternative ground for allowing the appeal, although remission was unnecessary because the appeal succeeded on the client issue.

• Employment Tribunal: held that Mr McCarrick’s employment transferred to Mr Hunter in August 2009 under regulation 3(1)(b) of the Transfer of Undertakings (Protection of Employment) Regulations 2006.
• Employment Appeal Tribunal: allowed the appeal, set aside that finding and substituted a finding that the employment did not transfer pursuant to TUPE.