Lorne Stewart Plc v Hyde & Ors

For a service provision change under Transfer of Undertakings (Protection of Employment) Regulations 2006, the tribunal must identify the activities actually carried out for the client before the change and decide whether the subsequent contractor will carry out activities that are fundamentally or essentially the same. The contractual extent of either party’s obligation to offer or accept particular work is not determinative.

The statutory inquiry focuses on the work actually undertaken and intended to continue. It does not require an employee to be performing that work on the precise day, or days immediately before and after, the transfer. The resulting factual findings are not open to appellate interference unless perversity is established.

Carillion provided heating, boiler, repair and maintenance services to Cornwall Council under a framework agreement. Some work was guaranteed, while other repair, replacement, installation and project work could be called off without an obligation on the Council to offer it or on Carillion to accept it.

Following a retendering exercise, Lorne Stewart Plc replaced Carillion from 1 April 2011. It accepted that a service provision change had occurred but denied that the employment of Mr Hyde and Mr Crowley transferred. The Employment Tribunal held that both claimants were assigned to the organised grouping of employees affected by the change and that their contracts transferred.

The appeal concerned whether non-guaranteed framework work could form part of the transferred activities, and whether the Employment Judge had sufficiently identified the activities performed before and after the change.

1. Appeal dismissed. The Employment Judge was entitled to find that both claimants were assigned to the organised grouping of employees subject to a relevant transfer.

2. The essential inquiry under regulation 3(1)(b) is factual. The tribunal must identify the activities carried out by the original contractor and determine whether the activities undertaken by the subsequent contractor are fundamentally or essentially the same. The conditions in regulation 3(3), and the assignment question under regulation 4(1), must then be addressed. The court applied the questions identified in Metropolitan Resources Ltd v Churchill Dulwich Ltd UKEAT/0286/08 and summarised in Enterprise Management Services v Connect-Up Ltd UKEAT/0462/10.

3. Whether the Council was contractually bound to allocate particular work, or Carillion was bound to accept it, was irrelevant. The proper focus was on what was actually being done before the change and what was intended to be done afterwards. Ward Hadaway Solicitors v Love and Ors UKEAT/0471/09 did not establish a contrary requirement.

4. The Employment Judge made permissible findings that Mr Crowley carried out repair and minor replacement work, and that Mr Hyde carried out planned replacement and installation work delivered under the framework arrangement. Those activities ceased to be performed by Carillion and were intended to be performed by Lorne Stewart, including project work when it arose. Project work was not confined to a single specific event or task of short duration.

5. It was unnecessary for either claimant to have been carrying out the relevant type of work on the transfer date or immediately surrounding days. The findings resolved the statutory issues and were not challenged as perverse. The Judge had identified the activities with adequate particularity.

• Employment Appeal Tribunal: appeal dismissed; the Employment Tribunal’s conclusion that the claimants’ employment transferred to Lorne Stewart Plc was upheld.
• Employment Tribunal, Truro: Employment Judge Matthews, sitting alone, held in a reserved judgment sent to the parties on 1 May 2012 that the claimants were assigned to the organised grouping affected by the relevant transfer.