Housing Maintenance Solutions Ltd v McAteer

The date of a TUPE transfer is the date on which responsibility for carrying on the undertaking moves to the transferee by operation of TUPE. It is not fixed by the parties’ intentions, their employment contracts, or the date when the transferee begins performing the activities.

A transfer may occur during a temporary suspension of activities and when no employees are working. Suspension, continuity of activities, workforce, assets and other circumstances are factors in determining whether and when a transfer occurred. The date of the undertaking’s transfer determines when employment contracts transfer by operation of law.

Kinetic Group Ltd provided housing repair and maintenance services to Liverpool Mutual Homes Ltd. Housing Maintenance Solutions Ltd was intended to take over those services, but it was not ready to operate the repair and maintenance contract until 1 July 2011. The Employment Judge nevertheless held that a TUPE transfer, alternatively a service provision change, occurred on 9 June 2011.

The appeal concerned the date of transfer. Housing Maintenance Solutions Ltd argued that the transfer could not occur before the activities resumed and most employees were engaged. The central issue was whether consultation, reassurance and preparatory employment arrangements established a transfer on 9 June 2011.

1. Appeal allowed. The Employment Judge’s finding that the undertaking transferred on 9 June 2011, and the alternative finding of a service provision change on that date, were set aside.
2. The court rejected the proposition that a transfer cannot occur until the transferee starts carrying out the transferred activities. Under Celtec v Astley, the relevant responsibility is responsibility as employer arising by operation of TUPE. It is not responsibility created by the parties’ wishes or by contracts of employment.
3. The date of transfer determines when the contracts of employment transfer. Treatment of employees as prospective employees, consultation, reassurance and the parties’ intentions do not determine the transfer date. Employment of staff may be an important factor in deciding whether a labour-intensive undertaking has transferred, but it is not itself the legal determinant.
4. A temporary suspension of activities, and the absence of employees, do not preclude a transfer. Under Landsorganisationen I Danmark v Ny Mølle Kro, those matters are relevant circumstances in applying the multifactorial approach required by Spijkers v Gebroeders Benedik Abbatoir CV and Another.
5. The Employment Judge’s reasoning treated the alleged acceptance of responsibility for employees on 9 June as determining the transfer date. That reversed the statutory sequence: responsibility for employees transfers because the undertaking transfers. The findings relied upon, including later engagement of managers, cleaners and other employees, did not establish a transfer on 9 June.
6. The matter was remitted to a different Employment Judge to determine the date of any transfer from Kinetic Group Ltd to Housing Maintenance Solutions Ltd, including whether the transfer was effected by a series of two or more transactions under regulation 3(6)(a) of the Transfer of Undertakings (Protection of Employment) Regulations 2006.

• Employment Appeal Tribunal: allowed the appeal against the Employment Judge’s decision following the 2013 Pre-Hearing Review, set aside the findings of a transfer and service provision change on 9 June 2011, and remitted the case to a different Employment Judge.
• Employment Tribunal: held that the undertaking transferred from Kinetic to Housing Maintenance Solutions Ltd on 9 June 2011, alternatively that there was a service provision change on that date.