Johnson Controls Ltd v Campbell & Anor (Transfer of Undertakings : Service Provision Change)

For a service provision change, the tribunal must identify the relevant activity and decide whether the activity carried on afterwards is fundamentally or essentially the same. This is a fact-sensitive and holistic inquiry. It is not resolved by simply counting tasks performed before and after the alleged transfer.

An activity may include the way in which a service is organised and delivered. A central, co-ordinated taxi administration service was capable of being an activity distinct from decentralised direct bookings by individual secretaries. The division of former tasks among others does not automatically prevent a service provision change, but neither does it establish one.

Johnson Controls provided a taxi administration service to UKAEA. Mr Campbell was assigned to that work. He received and co-ordinated bookings, arranged efficient use of taxis, dealt with invoices and performed associated administrative tasks.

UKAEA later ended the centralised arrangement. Its secretaries generally booked taxis directly with taxi companies. Mr Campbell claimed unfair dismissal and a statutory redundancy payment. The preliminary issue before the Employment Judge was whether his employment had transferred to UKAEA under the Transfer of Undertakings (Protection of Employment) Regulations 2006.

The Employment Judge held that there was no service provision change. Johnson Controls appealed. The central issue was whether UKAEA thereafter carried on essentially the same activity as the former centralised and co-ordinated taxi administration service.

1. Appeal dismissed. The Employment Judge was entitled to find that there had been no service provision change under regulation 3(1)(b)(iii) of the Transfer of Undertakings (Protection of Employment) Regulations 2006.

2. The first and critical inquiry is to identify the activity carried out by the original contractor. The tribunal must then decide whether the activity carried on after the alleged transfer is fundamentally or essentially the same. Minor differences may be disregarded, but the exercise is one of fact and degree.

3. The inquiry is holistic. A tribunal is not confined to itemising individual tasks and deciding whether most of them continue. An activity may be more than the sum of its component tasks, and the manner in which a service is organised may be material. The tribunal should remain alert to artificial manipulation, including a division of work among several people, but that possibility does not impose a task-counting approach.

4. Here the Judge permissibly identified the former activity as a central, co-ordinated taxi administration service. Centralisation enabled co-ordination, including taxi sharing, and supplied a single point for administration. Following the change, that service no longer existed: secretaries made direct arrangements with taxi companies and no central co-ordinating function was retained.

5. The Judge applied the correct approach and his factual conclusion was neither perverse nor undermined by immaterial inconsistencies or infelicities in the reasons. The EAT stressed that its conclusion did not create a general rule that splitting duties among persons after a change prevents a service provision change. The cross-appeal did not require consideration.

• Employment Appeal Tribunal: Appeal from Employment Judge A Gumbiti-Zimuto at Reading dismissed. The Judge's preliminary finding that no service provision change had occurred was upheld.
• Employment Tribunal: On a preliminary issue in claims for unfair dismissal and a statutory redundancy payment, held that the cessation of the centralised taxi administration arrangement did not transfer Mr Campbell's employment to UKAEA.