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April 28, 2017

What Constitutes a Service Provision Change Under TUPE?

The Employment Appeal Tribunal (EAT)’s decision in Tees Esk & Wear Valleys NHS Foundation Trust v Harland [2017] UKEAT 0173_16_0303 sheds new light on the factors to consider in determining whether there has been a service provision change under TUPE.

A team of carers provided care to an individual (CE) with severe learning difficulties under a contract held by an NHS Trust. The contract for those services was subsequently put out to tender and awarded to Danshell Healthcare (Danshell). The NHS Trust contended that the employment of the carers who cared for CE for more than 75 percent of their shifts transferred to Danshell as part of a service provision change under TUPE (SPC). A number of those carers claimed that there had been no SPC and therefore there had been no transfer of their employment.

Under TUPE, there will be an SPC if, immediately before the relevant transfer, “there is an organised grouping of employees situated in Great Britain which has as its principal purpose the carrying out of the activities concerned on behalf of the client”. The key issue for the EAT was to establish the “principal purpose” of the carers immediately before the contract was transferred to Danshell. The EAT clarified that both the actual activities undertaken by a grouping and the employer’s intent in organising the grouping were relevant factors; however, neither were determinative and each case would turn on its facts. 

Here, although the team of carers had initially been established to provide care to CE, its activities in providing this care immediately before the transfer had diminished so significantly that it was now a subsidiary (and not the principal) purpose of the team. As such, there had been no SPC and the carers’ employment had not transferred to Danshell.

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