C T Plus (Yorkshire) CIC v Black & Ors (Transfer of Undertakings: Service Provision Change)

A service provision change under regulation 3(1)(b) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 requires the same client throughout. The provision is construed according to its natural meaning; there is no wider purposive construction of its statutory scope.

That does not permit a narrow or legalistic approach. The tribunal must assess the practical reality of the activities. A client is an organisation able to perform the activities itself or commission another to do so on its behalf, not merely a person who benefits from them. A commercial operator acting for its own benefit, after the former client has ceded operational control, does not perform the activities on that client’s behalf.

The appellant had operated a subsidised park-and-ride bus service for Hull City Council. When the second respondent began an unsubsidised commercial service on the same route, the Council terminated the appellant’s contract. The second respondent used its own buses and staff. It had no contract to operate the service for the Council, although it held a non-exclusive licence to use the Council’s park-and-ride site.

Employment Judge Forrest held on 24 September 2015 that there was no relevant transfer or service provision change. The appeal concerned only service provision change. The central issue was whether the second respondent carried out the same activities on the Council’s behalf for regulation 3(1)(b)(ii) purposes.

1. Appeal dismissed. The Employment Judge made no error of law and reached a conclusion open to him. After the change, the bus operator ran an independent commercial service for its own benefit. It was not carrying out activities on the Council’s behalf. There was therefore no service provision change under regulation 3(1)(b)(ii) of the Transfer of Undertakings (Protection of Employment) Regulations 2006.

2. The scope of the service provision change provisions is determined by the natural meaning of their language. Following Hunter v McCarrick, [2013] IRLR 26, regulation 3(1)(b) requires the same client before and after the alleged change. That is an essential feature of the domestic statutory protection.

3. The natural-language approach does not require narrow, legalistic or pedantic reasoning. Following Metropolitan Resources Ltd v Churchill Dulwich Ltd, [2009] IRLR 700, tribunals should take a commonsense and pragmatic view of what was actually done, including whether activities are fundamentally the same.

4. In this context, a client is not simply the beneficiary or end-user of the activity. It is an organisation capable of performing the activity itself or commissioning another to perform it on its behalf. The Employment Judge properly considered the practical position as a whole. He was entitled to attach importance to the operator’s freedom to disregard the Council’s views, its operation of the route as a commercial venture, and the absence of the Council’s former control.

5. The Council’s licence of access to its site did not alter that conclusion. It was a licence for the operator’s benefit, not a contract under which the operator supplied the park-and-ride service to the Council. The challenge based on perversity also failed.

• Employment Appeal Tribunal: dismissed the appeal and upheld the conclusion that there was no service provision change: [2016] UKEAT 0035_16_0308.
• Employment Tribunal, Hull: Employment Judge Forrest held on 24 September 2015 that there was no relevant transfer or service provision change.