Case update (2): TUPE – Service provision change

Summary: For there to be a service provision change under TUPE, how ‘fundamentally’ the same do the activities carried out before and after the transfer need to be?

Not very, says the EAT in The Salvation Army Trustee Company v Bahi & Others, available here.

Facts: Under TUPE, a service provision change will only occur where the activities are “fundamentally” the same before and after the outsourcing or insourcing.

The Salvation Army took over provision of certain homeless person services for Coventry City Council. The contract had previously been with another provider CCL, also a charity.

Coventry City Council provided a range of services to homeless people through several providers. One of these providers, CCL, a charity, provided accommodation for homeless men and women in ten houses throughout Coventry. CCL also provided an assessment of potential service users (the homeless). If a service user was accepted, they were allocated a support worker. The support worker would produce a tailored support plan for them and provide support in accordance with that plan. Further support was provided once a service user moved into other accommodation. Service users were expected to move on within 12 months, though the contract with CCL provided that a service user could stay for up to two years.

The Council wanted to move to using just one provider for the above services to the homeless.  It therefore tendered for this purpose and the Salvation Army Trust won the contract.

There were four CCL employees affected by this process.  The Salvation Army refused to take them on as employees and argued that TUPE did not apply because it thought the services (the ‘activities’) as provided by it were sufficiently different from those provided by CCL so as to disapply TUPE.  CCL, however, argued that the services (‘activities’) were ‘fundamentally’ the same and that therefore the employees should transfer under TUPE.

There were several differences between the services provided by CCL and those provided by the Salvation Army. The Salvation Army used two large hostels rather than houses. It catered for a narrower age group and dealt with all referrals at an assessment centre. Where appropriate, service users would be found private accommodation straight away. Otherwise, they would go to an assessment unit where a support care plan would be produced before they were provided with supported accommodation in a hostel for up to 112 days. The hostels were staffed overnight and attended by support workers between 7am and 7pm (rather than 9am to 5pm, as with CCL).

The Tribunal found that TUPE applied.  It said that any definition of an activity cannot be too general and simplistic, and what was actually done needs to be examined. Equally, he said, the definition of activity should not be too narrow: changes in premises or the nature and quantity of activities, or the time over which such activities take place, do not necessarily mean that the activities are not fundamentally the same.  The activities before the change in contractor had been the provision of accommodation based support for homeless men and women and the input of a support worker to facilitate the individual returning to mainstream private accommodation as soon as reasonably practicable. This had remained fundamentally the same after the change.

The Salvation Army appealed. The EAT dismissed the appeal.

The EAT noted that the activities must be defined in a common sense and pragmatic way. They should not be defined at such a level of generality that they did not really describe the specific activities at all. A pedantic and excessively detailed definition of “activities” would risk defeating the purpose of the service provision change requirements.

Implications: This case is another example of the broad interpretation that courts tend to adopt when considering the application of TUPE. It demonstrates their reluctance to become too technical and preference for looking at the overall bigger picture and pragmatic approach. The decision is consistent with the Tribunal’s approach in recent years and employers should take from this case further evidence that it is not easy to sidestep TUPE.