Taurus Group Ltd v Crofts & Anor (Transfer of Undertakings : Service Provision Change)

For a service provision change under regulation 3(1)(b) of the Transfer of Undertakings (Protection of Employment) Regulations 2006, the activities before and after the alleged transfer must be carried out for the same client. A change in the ownership or management of premises does not itself preserve client identity.

The statutory concept is to be applied by a straightforward reading of its terms. A purchaser is not the client of a vendor’s security contractor merely because the vendor owes obligations to the purchaser pending completion. Where the client changes, there is no relevant transfer by way of service provision change.

The claimant was employed as a security officer at student accommodation. His employer, Reliance Security Services Ltd, had supplied security services at the premises. Following the acquisition of the premises by the Mansion Group, Reliance’s services ceased and Taurus Group Ltd was engaged to provide security services.

The Employment Tribunal held that the claimant’s employment transferred to Taurus under regulation 3(1)(b) of the Transfer of Undertakings (Protection of Employment) Regulations 2006. Taurus appealed. The central issue was whether there could be a service provision change where both the contractor and the client had changed.

1. Appeal allowed. The Employment Tribunal erred in holding that the relevant client was whoever required security services from time to time. The Appeal Tribunal followed Hunter v McCarrick [2012] IRLR 274. Regulation 3(1)(b) requires the activities to be performed for the same specific client before and after the change of contractor.

2. The Appeal Tribunal was bound, as a general rule, to follow its own considered decisions in the absence of conflicting appellate authority. Hunter, and Metropolitan Resources Ltd v Churchill Developments (in liquidation) [2009] IRLR 700, were such decisions. The service-provision-change regime is a distinct statutory concept and calls for a straightforward, common-sense application of the statutory words rather than an expanded purposive construction.

3. The proposed distinctions from Hunter failed. A vendor’s duty to preserve property pending completion did not make the purchaser the client of contractors engaged by the vendor. Nor did the purchaser’s email ending the existing services establish that it had become Reliance’s client. The evidence showed only that, as incoming owner, it no longer required Reliance’s services.

4. There was therefore no relevant transfer from Reliance to Taurus. Reliance was restored as a respondent to the unfair-dismissal claim and Taurus was dismissed from it.

• Employment Appeal Tribunal: Allowed Taurus’s appeal and set aside the finding that the claimant had transferred to Taurus under regulation 3(1)(b) of the Transfer of Undertakings (Protection of Employment) Regulations 2006.
• Employment Tribunal, Nottingham: By a judgment dated 18 October 2011, held that the claimant’s employment had transferred to Taurus as a service provision change.