The recent Employment Appeal Tribunal case of OCS Group UK Ltd v Mrs S Jones & Miss N Ciliza considered the issue of when a service provision change falls under the scope of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”).
The case turned on the requirement, under TUPE, for a Transferee to carry out “activities” that were previously performed by the Transferor.
OCS Group UK operated a centrally located restaurant and deli bar at BMW Mini’s Cowley plant. They wanted, for commercial reasons, to renegotiate the contract but were unsuccessful. A company called MIS was then retained by BMW Mini to supply catering services in place of OCS. OCS contended that TUPE applied. MIS contended otherwise.
The Employment Tribunal agreed with MIS. It said that the activity performed by MIS was substantially different from that carried on by OCS. OCS provided a restaurant and deli bar; MIS served sandwiches and salads from a van. The Employment Appeal Tribunal endorsed the decision. As a result, TUPE did not apply.
Comment
Conventional thinking would
suggest that there was no difference between the services provided
in this case because both companies provided food for staff, the
activity was “catering”, and the transaction was caught by TUPE.
The fact that the Employment Tribunal and Employment Appeal
Tribunal found in favour of the transferee undermines the
protection afforded to employees under TUPE and may, therefore, be
helpful to employers engaged in outsourced activities.
The decision opens the door to the resurrection of the so called ‘innovative bids’ exemption that was discarded by the Government during the consultation exercise which preceded the Regulations. That exemption allows a service provider to argue that it performs a service differently from the previous provider by employing an innovative method of making that provision. Such contractors may be able to leave behind the liabilities they might otherwise assume under TUPE thereby gaining a significant advantage in the bidding process.
Hill Dickinson has a wealth of experience in dealing with the full
range of employment and pensions issues. If you have any queries
relating to the above, or any other legal matter, please do not
hesitate to contact us
for advice.
