Department for Education v Huke & Anor (Transfer of Undertakings : Transfer)

For a service provision change under Transfer of Employment (Protection of Undertakings) Regulations 2006, the tribunal must first identify the activities required under the client contract. It must then decide whether the activities carried out after the change are essentially or fundamentally the same.

That factual assessment includes both the character of the work and its quantity. A substantial reduction in the volume of work may mean that the activities are materially different. It may also show that the relevant activity was no longer the organised grouping’s principal purpose immediately before the change. The tribunal must give adequate reasons and address material, unchallenged evidence on those matters.

Evores, an IT-support contractor, provided services to the Department for Education. By the end of the contract only Mr Huke remained assigned to it. There was evidence that the contractual work had reduced substantially and might occupy 25% or less of one full-time employee’s time.

The Employment Tribunal held that a service provision change under Transfer of Employment (Protection of Undertakings) Regulations 2006 had occurred when the Department resumed some work in-house. It accordingly found that Mr Huke’s employment had transferred and that his exclusion from work was automatically unfair dismissal.

The Department appealed. The central issues were whether the Tribunal had lawfully assessed the relevant activities and the employee’s principal purpose, including the substantial diminution in work, and whether its reasons adequately addressed the evidence.

1. Appeal allowed. The Employment Tribunal’s judgment was set aside and the claim was remitted to a freshly constituted Tribunal.

2. For regulation 3(1)(b)(iii) of the Transfer of Employment (Protection of Undertakings) Regulations 2006, the relevant activities are those which the client required the contractor to perform on its behalf. Following Metropolitan v Churchill Dulwich Ltd [2009] ICR 1380, the tribunal must identify those activities and decide whether the activities carried out by the alleged transferee immediately afterwards were essentially or fundamentally the same.

3. The assessment is one of fact and degree. Minor or trivial differences may be ignored, but it is insufficient merely to identify work with the same labels. The tribunal must consider the character and types of work and its quantity. A substantial reduction in volume may establish that the post-transfer activities are not essentially the same as those carried out before the change.

4. Quantity also bears on regulation 3(3)(a)(i). A marked reduction in contractual work may mean that the relevant activity was no longer the organised grouping’s principal purpose immediately before the service provision change. In a one-person grouping, work occupying a quarter or less of the employee’s time, particularly if some work was outside the contract, could not readily be treated as the principal purpose. The necessary conclusion nevertheless depends on findings of fact in the individual case.

5. The Tribunal had not addressed material and apparently unchallenged evidence that the remaining contractual work was 25% or less of full-time work, nor evidence that some work was directly instructed and paid for outside the contract. It also failed to explain what it made of material evidence concerning an alleged diversion of work. Its reasons were therefore inadequate.

6. There was no basis for treating consideration of work volume as enabling a client to evade TUPE. A service provision change can occur before the contractual end-date: where contractual activities cease to be performed by the contractor’s employees and are instead performed by the client, the Regulations may apply at that earlier point.

• Employment Appeal Tribunal: allowed the Department’s appeal, set aside the Tribunal’s finding of a TUPE transfer, and remitted the claim to a freshly constituted Employment Tribunal.
• Employment Tribunal, Watford: held that Mr Huke’s employment transferred to the Department under the Transfer of Employment (Protection of Undertakings) Regulations 2006 and that his exclusion from work was an automatically unfair dismissal.