Horizon Security Services Ltd v Ndeze & 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 services must be provided for the same client before and after the alleged transfer. This domestic provision receives its ordinary meaning; ownership of premises does not, without more, establish that the owner was the contractor’s client.

For regulation 3(3)(a)(ii), the tribunal must examine the client’s intention immediately before the alleged change. The intention must concern the task for which the activities are performed, rather than the activities themselves. Whether a task is of short-term duration is a contextual question of fact and degree.

The claimant had worked as a security guard at Alpha Business Centre. PCS Group provided security services under a contract with Workspace Plc. When Workspace ceased managing the site, the London Borough of Waltham Forest separately engaged Horizon Security Services Ltd to guard it pending redevelopment.

PCS contended that the claimant’s employment transferred to Horizon under the service-provision-change provisions of the Transfer of Undertakings (Protection of Employment) Regulations 2006. The Employment Tribunal held that the borough was the client both before and after the change and that the new security work was not connected with a short-term task.

Horizon appealed. The central issues were whether there was continuity of client and whether the intended guarding arrangement fell within the short-term-task exclusion.

1. Appeal allowed. The Employment Tribunal’s decision was quashed and substituted with a decision that the claimant’s employment did not transfer to Horizon.

2. Regulation 3(1)(b) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 requires continuity of the same client. Applying Hunter v McCarrick, [2013] IRLR 26, the provision is domestic and must be construed according to its ordinary language. There was no basis for a purposive construction which treated the owner of the premises as the client.

3. On the Tribunal’s own findings, PCS contracted with Workspace, which gave notice terminating the security arrangement. The guards performed their functions pursuant to that arrangement, including functions for Workspace and its tenants. PCS had no relevant relationship with the borough before 25 January 2013. The Tribunal’s contrary conclusion was an unsupported inference from the borough’s ownership of the building.

4. PCS bore the burden of establishing a relevant transfer and had not shown that its client was anyone other than Workspace. Horizon was engaged by the borough. The clients were therefore different, so no service provision change occurred.

5. For completeness, the Tribunal had also erred on regulation 3(3)(a)(ii). The relevant inquiry was the client’s intention immediately before the alleged change, directed to the task rather than simply the security activities. The relevant task was guarding the site pending demolition and construction of a supermarket. The Tribunal wrongly relied on the position at the later hearing.

6. Whether the anticipated eight- to nine-month task was short-term was a question of fact and degree. The contrast with the previous arrangements could be relevant, but more than one conclusion was possible. That issue would ordinarily require remittal, but remittal was unnecessary because the absence of a common client was determinative.

• Employment Appeal Tribunal: Appeal allowed. The Tribunal’s preliminary decision was quashed and replaced with a finding that the claimant’s employment did not transfer to Horizon.
• Employment Tribunal: East London Employment Tribunal, Employment Judge Goodrich, sitting alone on 16 September 2013; reasons sent on 30 October 2013. It had held that the claimant transferred under the Transfer of Undertakings (Protection of Employment) Regulations 2006.