WGC Services Ltd v Oladele & Ors (Transfer of Undertakings : Service Provision Change)

Under Transfer of Undertakings (Protection of Employment) Regulations 2006, a service-provision-change analysis requires separate findings on the relevant activities, the organised grouping whose principal purpose was to perform them, the cessation and resumption of those activities, and the employee’s assignment to that grouping.

An employee’s work on a contract immediately before transfer does not of itself establish assignment. The tribunal must identify the proper unit of activities and grouping, and make findings about the employee’s actual duties and relationship to that grouping. Separate contracts and transfers at individual sites cannot be aggregated without an explained factual basis.

JKG provided cleaning and housekeeping services at Premier Inn hotels. As the individual hotel arrangements ended, different contractors took over different sites. WGC acquired six contracts, including the three largest remaining sites.

The claimants were JKG area managers, one also holding training-manager responsibilities. The Employment Tribunal held that they were assigned to an organised grouping of employees transferred to WGC. WGC appealed, contending that the Tribunal had not identified the relevant grouping or made sufficient findings on assignment.

The central issue was whether the Tribunal had correctly analysed the statutory requirements for a service provision change and the claimants’ assignment immediately before the relevant transfer.

1. Appeal allowed. The Employment Judge’s decision could not stand because it lacked the findings and structured reasoning needed to determine whether the claimants’ employment transferred.
2. For a service provision change under Transfer of Undertakings (Protection of Employment) Regulations 2006, the tribunal must address distinct questions: the activities carried out for the client; whether an organised grouping had as its principal purpose performing those activities; whether the activities ceased and were performed by another contractor; and whether the employee was assigned to that grouping.
3. The questions may involve overlapping evidence, but they remain analytically separate. The fact that an employee worked on the contract does not necessarily establish assignment. An employee may work temporarily with the requisite grouping without being assigned to it. The Tribunal had to examine the claimants’ actual duties immediately before transfer, including the first claimant’s training role, their contractual position, and the sites to which they were assigned.
4. The Employment Judge had not adequately explained why the activities of separately contracted and separately terminated hotel services could be treated as one aggregate. If each hotel was the relevant unit, separate findings were required as to any organised grouping at that hotel and whether either area manager was assigned to it.
5. Primary findings of fact were required. The case was remitted for a rehearing before a freshly constituted Employment Tribunal.

• Employment Appeal Tribunal: Allowed WGC’s appeal and remitted the matter for rehearing.
• Employment Tribunal, London (South): On 7 September 2012, Employment Judge Freer held at a pre-hearing review that the claimants were assigned to the organised grouping subject to a relevant transfer.