Arch Initiatives v Greater Manchester West Mental Health NHS Foundation Trust & Ors

For a service provision change under the Transfer of Undertakings (Protection of Employment) Regulations 2006, activities has its ordinary and unqualified meaning. It need not mean the whole service provided by the outgoing contractor. A functionally distinct subset of activities may transfer to one incoming contractor, while other activities transfer elsewhere.

The tribunal must identify the relevant activities and decide whether they are fundamentally or essentially the same after the change. It must also decide whether there was an organised grouping of employees whose principal purpose was those activities. These are questions of fact and degree, subject to appellate intervention only for legal error or perversity.

Bolton Council re-tendered drug and alcohol treatment services previously provided predominantly by the Trust. The re-tender separated assessment, recovery planning and case management from the delivery of interventions. Arch obtained the case-management lot, while Lifeline obtained the intervention lots.

The Employment Tribunal held that there was a service provision change from the Trust to Arch. It found two organised groupings of employees: the claimant case managers and Mrs Aulton, the alcohol-team manager. Arch appealed against the Tribunal’s construction of the service provision change regime, its identification of the activities, and its findings on organised groupings and assignment.

1. Appeal dismissed. The Employment Tribunal made findings open to it and committed no error of law.

2. Regulation 3(1)(b) refers simply to activities which cease to be carried out by an outgoing contractor and are carried out instead by another. The word is neither defined nor qualified as all, principal, or whole activities. It cannot be equated with the word service. Accordingly, an SPC may concern activities forming a subset of a wider service, including where a re-tender divides functions between different incoming contractors.

3. The statutory safeguards are found in the conditions in regulation 3(3), particularly the requirement for an organised grouping of employees whose principal purpose was the activities concerned. The tribunal must identify the activities, assess whether those performed after the change are fundamentally or essentially the same, and then assess the grouping and assignment. Each exercise is one of fact and degree.

4. The Employment Judge had taken a broad and holistic view of the Trust’s activities. The findings properly distinguished assessment, recovery planning, case management, referral, interventions, monitoring and discharge. The Judge was entitled to find that, apart from delivery of interventions, the activities continued in Arch’s hands and were fundamentally the same. The functional division between Arch and Lifeline did not itself preclude an SPC.

5. Mrs Aulton could, on these particular facts, constitute an organised grouping of one. Her management role for the alcohol team was deliberately created for Bolton’s service and no one else assisted in that singleton management role. That conclusion does not mean that a team manager should ordinarily be disaggregated from the team.

6. The remaining claimants were also found, on permissible factual findings, to be an organised grouping of case managers with the requisite principal purpose. The associated assignment challenge therefore failed.

• Employment Appeal Tribunal: dismissed Arch’s appeal and upheld the Employment Tribunal’s finding of a service provision change under the Transfer of Undertakings (Protection of Employment) Regulations 2006.
• Employment Tribunal: Employment Judge Franey, by judgment promulgated on 27 July 2015, held that relevant employees transferred from the Trust to Arch under the service provision change provisions. No citation was stated.