Service Provision Change Exception for Tasks of Short Term Duration


3 mins

Posted on 10 Dec 2015

An employment tribunal may take into account events following a change in service provider, when considering whether a client intends that after the change the activities will be carried out in connection with a task of short term duration.

Speedread

When considering whether the exception in TUPE for tasks of short term duration applies, an employment tribunal should take account of events taking place after the contract was entered into if these shed light on the client's intention at the time it entered the contract.  In this case, findings that no planning permission had been obtained and no building work carried out by the time of the hearing may have raised questions as to whether the client could genuinely have intended that the task would be of short term duration, and as to whether that could have been an intention rather than a "hope and wish", which is insufficient .

Facts

In ICTS v Mahdi, ICTS provided security services to Middlesex university at one of its former campuses. When the site was sold, the new owner put the contract out to tender and First Call became the new service provider. First Call argued that TUPE did not apply and refused to employ Mr Mahdi and other ICTS employees who had been working on the contract.

First Call argued that ICTS had a contract to secure an operating site. By contrast, First Call had a contract simply to look after the site pending its redevelopment by the new owners. TUPE does not apply where the client awarding the contract intends that after the change in service provider the activities will be carried out in connection with a task of short term duration. First Call argued that this was a contract for a task of short term duration and TUPE did not apply.

The employment tribunal accepted First Call’s argument that when the contract was granted, it was the client’s intention that the contract was for a limited period, to look after the site pending construction. It had to consider the client’s intention at the date of the contract. It was not entitled to take account of subsequent events. It could not therefore take account of the fact that by the time of the hearing (9 months later) no planning permission had been obtained and no building work had started. It ruled that the exception applied and there had been no service provision for TUPE purposes.

ICTS appealed, arguing that the judge was wrong to wholly ignore events subsequent to the contract being entered into. The EAT agreed. Subsequent events can be relevant in deciding someone’s intention and it is an error of law to wholly ignore such events. Here, findings that no planning permission had been obtained and no building work carried out may have raised questions as to whether it could genuinely have been intended that the task would be of short term duration and as to whether that could have been an intention rather than a "hope and wish", which is insufficient .

Implications

Employment tribunals have to consider the client’s intention at the time it enters the contract. However, they must take account of subsequent events if those events cast light on the client’s intention at the relevant time. The employment tribunal in this case could still decide, having taken subsequent events into account, that ICTS did intend the contract to be for a task of short term duration. It was just wrong to have ignored those events completely when assessing the ICTS’s intention.  

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