TUPE: Services provided after a change in service provision
Under Regulation 3(1)(b) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) a transfer occurs where:“activities cease to be carried out by a person ("a client") on his own behalf and are carried out instead by another person on the client's behalf ("a contractor")”It is a requirement of TUPE that the "activities" carried out after the transfer must be identifiable as the pre-transfer activities for a service provision change to occur. However, those activities may be carried out in a different way. In a recent Employment Appeal Tribunal (EAT) decision (Nottinghamshire Healthcare NHS Trust v Hamshaw and others) the EAT re-stated the proper approach which should be followed when there is any question in relation to the ‘activities’. The FactsIn the Hamshaw case, the NHS Trust operated a full service care home. The care home was closed and the residents were relocated to new homes of their own. Two new independent contractors were hired to provide the care services to the residents in their own homes. The NHS Trust held the view that TUPE applied and that those staff who had previously provided the care services should transfer to the new contractors.The DecisionThe EAT agreed with the contractors and said that the new arrangements (whereby the residents lived in their own separate homes) meant that the services being provided were different and could not be considered as being the same ‘activities’. In particular the EAT relied on the fact that the contractors would be assisting the former residents to autonomously undertake domestic tasks where as formerly the service provided was much more comprehensive. Accordingly, the service being provided could not be said to be fundamentally or essentially the same as the service provided before the change. What does this mean for you?Since TUPE 2006 came into force and introduced the new rules on service provision changes there have been a number of cases where the transferee (that is the new service provider) has argued that the service being provided is different so as to avoid taking on any new employees from the transferor (typically the client or another contractor). In every case where your business is taking over a contract for the provision of services, careful thought must be given to the nature of the services which you will provide and whether that significantly differs from the services provided in-house or by another contractor prior to the change.
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