Jinks v London Borough Of Havering

For a service provision change under TUPE Regulations 2006, activities before and after the alleged transfer must be carried out for the same client. Where the outgoing provider is a sub-contractor, however, its immediate contractual counterparty is not necessarily its only client.

Read with regulation 2(1), regulation 3(1)(b) requires a factual inquiry into the person on whose behalf the sub-contractor performed the activities. The principal in a contractual chain may be the real or ultimate client. A tribunal should not strike out a claim by assuming that a sub-contractor can act only for the contractor from whom it holds the sub-contract.

The Claimant alleged that his employment transferred to the Council when it resumed operation of a car park previously managed through a chain of contracts. The Council had contracted with Saturn Leisure Ltd, which sub-contracted car-park management to Regal Car Parks Ltd. The Claimant contended that he was employed by Regal when the Council took the function in-house.

Employment Judge Kurrein struck out the constructive unfair dismissal claim without hearing evidence. He held that Saturn, rather than the Council, was necessarily Regal’s client for the purposes of regulation 3(1)(b) of the TUPE Regulations 2006. The Claimant appealed. The central issue was whether the Council could, on the facts, have been Regal’s real or ultimate client despite no direct contractual relationship.

1. Appeal allowed. The Employment Judge misdirected himself by treating the entity contractually bound to the sub-contractor as necessarily, and exclusively, the sub-contractor’s client.

2. Regulation 2(1) provides that “contractor” includes a sub-contractor. Accordingly, regulation 3(1)(b)(iii) may apply where activities cease to be carried out by a sub-contractor on a client’s behalf and are then carried out by that client itself. The identity of the client remains a question of fact. The direct contractor may be a client, but the principal may also be the real or ultimate client.

3. The Tribunal accepted the reasoning in Horizon Security Services Ltd v Ndeze, UKEAT/0071/14/JOJ. A sub-contracting relationship does not itself answer who the client is. The possibility of more than one client, and the question of the real client, require factual determination.

4. The pleaded material, read with the Claimant’s Reply to the Grounds of Resistance, sufficiently advanced a case that Regal provided services for the Council. The claim therefore raised a factual issue and could not properly be struck out on the narrow legal basis adopted below.

5. The strike-out application was remitted to an Employment Judge, who might be Judge Kurrein or another judge as directed. It was remitted at large so that the application could proceed on its existing or amended basis.

• Employment Appeal Tribunal: allowed the appeal and remitted the strike-out application to an Employment Judge.
• Employment Tribunal: Employment Judge Kurrein struck out the Claimant’s unfair dismissal claim on 30 October 2013 as having no reasonable prospect of success.