Mr D Stenson and Others v Smart DCC Ltd: 2403467/2024 and Others
REASONS
[1]This preliminary hearing was held to decide whether there had been a relevant transfer from Capita Business Services Limited (CBSL) to the respondent on or about 31 March 2024 and, if so, whether the claimants ( or any of them) were assigned to the undertaking that transferred. This Hearing[2]The preliminary hearing was listed over 2 days. Case Management Orders had been made. The parties had agreed some amendments to these, most notably had agreed 15 May 2025 as the date for exchange of statements. The claimants complained that the respondent had failed to comply with these, in that:-a. The respondent’s solicitors (CMS Cameron McKenna Nabarro Olswang LLP) had not sent the respondent’s witness statements on 15 May. Instead these had been sent on 16 May.b. They then provided more disclosure as well as 2 supplementary statements just 2 days before this hearing.[3]In addition, the respondent’s solicitors provided a draft amended response, at about 5pm on the evening before this hearing.[4]Understandably the claimants were unhappy at the respondent’s attempt to include new detail so soon before the hearing and particularly its apparent disregard for the case management orders.[5]Ms McGrady told me that the respondent had intended to exchange statements on 15 May but had been unable to contact Mr Stenson to arrange this. As it was the claimants’ statements were sent at 11pm on 15 May. Ms McGrady saw this on arrival at the office on 16 May and immediately sent over the respondent’s statements.[6]As for the supplementary statements and documents, Ms McGrady told me that they were necessary to clarify or correct position, particularly the identity of the employer of the witnesses.[7]Mrs Ms Grady’s explanation about the service of witness statements on the morning of 16 May was a reasonable one and I told Mr Stenson that I had no issue with this.[8]I also decided to allow the respondent to rely on the new statements and recently served documents. I did however explain to Mr Stenson that if he believed the claimants suffered significant disadvantage by having to consider and address statements so late, then I would consider postponing the hearing and/or making a preparation costs order in favour of the claimants. I explained what this was.[9]Mr Stenson told me that the claimants were content to proceed. They did not require a postponement.[10]I heard from Jo Ashton (Deputy Director of Service Enablement) on the afternoon of day one.[11]On the morning of day 2, I heard from:a. Timothy Nock, who was at all relevant times the manager of the Technical Operation Centre (TOC).b. Steven Howard, HR Project Lead.[12]I then heard from the claimant Mr Stenson on the afternoon of day 2. The parties agreed that it was not necessary for other claimants to give evidence. All relevant evidence for this preliminary hearing was contained in Mr Stenson’s statement.[13]We reconvened on 18 July 2025 so I could hear submissions and make a decision which I reserved, to provide these full reasons.[14]I was given a file (bundle) of documents with 814 numbered pages.[15]Both parties attended with additional pages. I added these to the main bundle providing for 1044 pages in all. References below to page numbers are references to this bundle. I told the parties that I may not take any note of a document that they had not referred me to.The Issues
[16]The parties attended the final hearing having agreed a list of issues. With a couple of small changes at the start of the hearing, we arrived at the list of issues set out below: 1. Was the insourcing of some of the activities that had been done by the night /out of hours service to the Respondent a service provision change within the meaning of section 3(1)(b) of Regulation 3 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE)? To determine this, the following will be considered:a. Are the activities carried out by the Respondent fundamentally the same as the activities that had been carried out by CBSL? (TUPE Regulation 3 section 3(2A)); andb. Immediately before the service provision change was there an organised grouping of employees situated in Great Britain which had as its principal purpose the carrying out of the activities concerned on behalf of the Respondent (TUPE Regulation 3 section 3(a)(i))? 2. If so, were the claimants assigned (within the definition at regulation 2 of TUPE) to the service that transferred and did their employment transfer to the Respondent by operation of law, pursuant to Regulation 4? 3. If there was a relevant transfer, what was the date of this transfer? Findings of Fact Smart DCC Limited (i.e. the respondent)Findings of Fact
[17]The respondent is part of the Capita Group of companies. It operates and maintains the communications network that enables energy consumers and energy companies to operate smart meters (the Network). The Network enables information about energy usage to be transferred from the consumer’s smart meter to the energy provider.[18]The respondent also facilitates the arrangements necessary when consumers switch from one energy provider to another (Switching).[19]The Network is a national one. Only the Network enables communications to and from smart meters. No organisation provides an alternative. The respondent operates and maintains the Network via a licence granted by the Government (Licence). Extracts from the Licence document are in the bundle.[20]The terms of the Licence require the respondent to engage in procurement of certain services from external service providers on a competitive basis (Condition 16 of the Licence – page 167).[21]In the original grounds of resistance (GOR) it was pleaded that the respondent was not permitted to directly employ any employees – therefore take it that means all services had to be subject to competitive external procurement – but this position changed in the amended Grounds of resistance. That assertion is no longer made.[22]The claimants provided Annual Reports of the respondent. I note from these, particularly the financial aspects of the 2024 report at page 909 that financial figures for staff costs are set out. These are the costs of those employees in teams that are regarded as “internal” Smart DCC teams but are in fact of employees employed by another Capita company. This is what the report says: Staff are legally employed by a related party, Capita Business Services Limited (CBSL) for the benefit of the Company. Staff costs incurred by CBSL on behalf of the Company are recharged to the Company on a monthly basis at cost, with an overhead charge added. This includes pension contributions made by CBSL for employees enrolled in the Capita defined benefit pension scheme, the liability for which is included in the financial statements of the ultimate parent undertaking. No costs associated with the administration of the scheme are charged to the Company. Capita Business Services Limited. (CBSL)[23]CBSL is also part of the Capita Group of companies.[24]CBSL operates some of the services that the respondent needs in order to meet its obligations under the terms of the Licence. It does so under an agreement between the respondent and CBSL dated 1 February 2016 (the 2016 Agreement). I refer to these as the outsourced services. The bundle contains extracts from the 2016 Agreement.[25]I note the following clause:- “23. STAFF TRANSFER The parties acknowledge that the commencement, expiry or termination of this Agreement or any Services and the provision of certain services during the Service Period may constitute a relevant transfer for the purposes of the Employment Regulations. However, the DCC and the Contractor agree that it is the intention of the parties that at the Signature Date and at all times during the Service Period, and upon termination or expiry (for whatever reason whether in whole or in part), the Employment Regulations shall not apply in such a way so as to transfer the employment (or any associated or related liabilities) of any employees or former employees of the DCC, any DCC Service Provider, any DCC Service User or any DCC Service User Provider to the Contractor or any Contractor Person in connection with the commencement or provision of any DCC Service. The provisions of Schedule 9.1 (Staff Transfer) shall apply from the Signature Date.[26]Clause 23 tells me that(1) it is possible under the terms of the agreement, for some services only to stop being covered by the agreement. Cessation or transfer of services does not have to be of all services provided under the 2016 Agreement;(2) that on termination or expiry of some or all of the services, the contracting parties ( the respondent and CBSL) do not expect TUPE to apply.[27]As noted above, CBSL is also the company within the Capita Group that employs the employees who work for the respondent. Those employees work within teams that carry out activities for which the respondent is directly responsible; by which I mean activities that have not been outsourced by the respondent. This activity is what gives rise to the staff costs in the respondent’s annual reports as noted above.[28]This arrangement can lead to confusion; that was apparent from the evidence of 2 of the respondent’s witnesses – Ms Ashton and Mr Nock. In their witness statements exchanged on 15/16 May 2025 both gave evidence that they were employed by the respondent (Smart DCC Ltd). Some 2 or so days before this hearing, they provided supplementary statements that corrected this and explained that their employer is in fact CBSL.[29]These employees (and others) consider themselves as Smart DCC employees; they have Smart DCC email addresses; they reference their employer as Smart DCC; Smart DCC is a strong brand and they associate themselves and their work with it. The routing of their employment through CBSL is an administrative function within the Capita group.[30]The confusion at an individual level is understandable. I heard evidence from Steven Howard, HR Project Lead working with the respondent ( although his employer is CBSL). His witness statement includes the following:- “Smart DCC has a strong brand. For example we have equipment, email addresses and documents that are branded as smart DCC. The template contract of employment states “Further to our recent discussions I’m very pleased to offer you the position of Role at Smart DCC a wholly owned subsidiary of Capita plc.”[31]Mr Howard also confirmed in answers to questions from Mr Stenson, that the respondent has its own premises and its own HR policies ( different to those operated by CBSL). But Mr Howard’s statement also notes the separate line in the template employment contract which says “This statement confirms that ****** is employed as ***** by Capita Business Services Limited ( thereafter known as the Company) with effect from *****”[32]Those employees who work for CBSL to carry out the outsourced services provided under the terms of the 2016 Agreement consider themselves as (and are) CBSL employees. They work for CBSL, carrying out a service for a client (the respondent) under commercial arrangements, albeit that the service provider and client form part of the same corporate group.[33]The work carried out by the TOC team are not services carried out under the 2016 Agreement. The respondent has not outsourced the services that the TOC team carry out. However the group company that is the employer under the terms of their employment contracts is CBSL. The Out of Hours Team[34]Those services that CBSL carry out for the respondent under the terms of the 2016 Agreement are wholly or mainly carried out by a team of CBSL employees called the Service Centre.[35]In her evidence, Ms Ashton, referring to the 2016 Agreement, noted a requirement for the Service Centre to be available 24 hours a day, 365 days a year. The term Ms Ashton referred to is under Part D of the 2016 Agreement, headed “Service Desk requirements” (page 416) and clearly distinguishes between daytime work and nighttime work. “1.4.10 From the Commencement Date until the end of the Term, or such other date as subsequently agreed between the parties, the Service Desk shall be available between 08:00 – 20:00 Monday – Sunday. Any out of hours support to cover Major Incidents or Service Requests, for the SMETS Service Desk and Switching Service Desk Service, will be covered by the 24 x7 Incident Management support service.[36]The services provided “out of hours” (those evening/nighttime hours when the Service Centre team is not working) were, until April 2024, carried out by the Out of Hours team (OOH team).[37]The services provided by the OOH team did not require them to carry out all of the tasks that the Service Centre carried out.[38]The services provided under the terms of the 2016 Agreement are described in schedule 2.1 of that agreement under the heading “Scope.”(pages 411 -412). 1. The Contractor will provide 1st Line Support Services to DCC and DCC Service Users; logging requests, Incidents, queries and changes, fielding calls, emails and communications through Service Management System to action and route or provide guidance on all incoming contacts. The relevant Service Management System for the SMETS Service Desk is the SMETS SMS and the relevant Service Management System for the Switching Service Desk is the Switching SMS. The Contractor will operate its front-line Service Desk team to manage the provision of an overall Service Desk service, where the DSP will provide 2nd line Service Desk capabilities for DCC Data Services; the CSP(s) will provide 2nd line Service Desk capabilities for DCC Communication Services; other DCC Service Providers will provide 2nd line Service Desk capabilities for other DCC Service Provider facilities, goods, services or other supply and the relevant Switching Service Provider(s) will provide 2nd line support for the Switching Services. 2. The relevant Service Management System will manage the core ITIL® disciplines and will be the one version of the truth regarding the management of the SMETS Service Desk and the Switching Service Desk Service. The relevant Service Management System will provide a ‘one stop shop’ for all contacts from DCC and DCC Service Users, this will include role-based access to the relevant Service Management System and the DCC Self Service Interface. 3. The Contractor will, subject to the DCC providing the capability, provide for:• A level of triage using an appropriate level of automated/scripted diagnostic tooling that enables the Service Desk to resolve a high proportion of incidents without recourse to DSP or CSP(s) or other DCC Service Providers as appropriate second line service desks, with DSP and CSP(s) and other DCC Service Providers as appropriate providing access to appropriate diagnostic capability• The use of knowledge-based tools/scripting to aid in incident resolution with DSP CSP(s) and other DCC Service Providers as appropriate providing knowledge for their services• Where information feeds are made available by the DCC, the Contractor shall observe and react to such information appropriately. For the avoidance of doubt the Contractor is not required to conduct proactive monitoring. “The Contractor” is CBSL. “DCC Service Users” are the energy companies that receive and send data on the Network. Other terms within the above extract are defined within the 2016 Agreement. It is not necessary to set out those definitions.[39]Part D of the 2016 Agreement sets out Service Desk requirements. These include a requirement for a “first line support service Desk to provide a single point of contact for DCC Service Users) (para 1.4.2) and a requirement for a service desk to be available 365 days a year (366 days in a leap year) (1.4.3) (pages 415 and 416).[40]In his evidence, Mr Nock provided a helpful, one sentence summary of these services “CBSL was to provide a service desk to resolve incidents raised by Smart DCC’s customers.” The Service Centre team provided the service desk.[41]CBSL assembled and maintained the OOH team to ensure continuity of services overnight, particularly a first line support having regard to the requirements for a 24-hour incident management support service (see above).[42]Whilst I was not referred to a specific provision in the Licence, Mr Stenson’s evidence (not contested) was that there was a regulatory requirement mandated under the Smart Energy Code to maintain services to ensure the operation of the Network on a 24-hour basis.[43]The respondent subcontracted these responsibilities (or many of them) to CBSL under the terms of the 2016 Agreement.[44]Members of the OOH team worked from one of 2 sites; one in Manchester and the other in Ruddington. Whilst some remote working was carried out around the time of the pandemic, at all relevant times (from well before the alleged transfer) all OOH team members spent the whole of their working time at one of these 2 sites.[45]The Out of Hours team operated between 20.00 and 08.00. There were 2 teams of 4 working night shifts on a shift pattern that ensured one team was on shift every night. One of the claimants (Darren Stenson) was the OOH team leader. The other claimants were all employed as team members/analysts.[46]Each analyst was required to work on all activities carried out by the OOH team.[47]The OOH team was required to monitor and respond to incidents on the Network. Incidents were categorised from 1 to 6 in terms of severity with 1 being the most severe type of incident. Initial categorisation of incidents was done by the DCC Service User raising the incident. When these were reported, the OOH team were required to review that categorisation and either confirm it or recategorize it. Once satisfied that the incident was correctly categorised, they would take steps, applying such urgency and undertaking such activities, as the category required.[48]Mr Nock’s evidence (not disputed) was that incident response was the main activity carried out by the Out Of Hours team. (paragraph 34 of TN’s statement)[49]Consistent with this is the description of the Service Centre activities as at paragraph 10 of the amended grounds of resistance. “Its main activity was to be the point of contact for the Respondent’s customers and suppliers who have incidents or requests in relation to their live service that need to be resolved.” The OOH Team provided this “point of contact” service between 8pm and 8 am.[50]Incidents were things that happened that threatened the operation of the Network and had to be remedied. How analysts reacted to an incident would be dependent on the severity of the incident. The response times are set out in an appendix ( Appendix AG – Incident Management Policy) to the “Smart Energy Code dated September 2013 (pages 122-149). This Code sets out requirements that the respondent must adhere to in its operation of the Network,[51]Where a category 1 incident occurred then the analysts would be expected to provide notification within 5 minutes of the incident being received and “respond” within 10 minutes. Response involved noting the incident and passing it to the respondent’s Major Incident Team for resolution.[52]Incidents in category 2 also required quick notification and response times by the analysts and them passing the incident to the Major Incident Team. and resolution within 24 hours. Category 3 incidents needed responding to within 45 minutes and resolving within 72 hours and the OOH team worked to resolve category 3 incidents once they had triaged and categorised them as such. Category 4 and 5 incidents were increasingly relaxed times for notification, response and resolution. (Category 4 – response within 4 hours and resolution within 5 days), category 5, response within 1 day and resolution within 10 days). The OOH team did undertake steps in relation to these categories 4 and 5 in that they received and responded to them and ensured correct categorisation. The OOH team also took steps to resolve them on the same shift that they were reported, where time permitted. Otherwise the resolution of category 4 and 5 incidents was left for the daytime Service Centre.[53]The Out of Hours team did not take any steps in relation to category 6 incidents. Such incidents were not at all urgent and all tasks (even notification/logging) were picked up by the next day time shift in the Service Centre.[54]As far as incidents within categories 4 -5 were concerned, the analysts in both the Out of Hours team and the “daytime” Service Centre would also carry out initial investigations and attempt to resolve those incidents rather than automatically pass these on. The extent of the work being carried out by the Out of Hours centre analysts on category 4 or 5 incidents would depend on the amount of capacity that the analysts on shift had. It was not work that had to be done over the course of an OOH team shift and could be left to the next day time shift. However if there was capacity then an OOH team analyst would make some progress in investigating and attempting to resolve the incident. Mr Stenson’s evidence (not contested) was that when an OOH team member did work on a category 4 or 5 incident and was able to successfully resolve it, that would take no more than a few minutes.[55]The OOH team was required to be on hand for incidents as and when they arose. The claimants’ position is that their responsibilities included being on standby, out of hours, ready to deal with incidents as noted above. this included being on standby for phone calls, emails or incidents that were notified through an IT system related to the Network, called Remedy.[56]There were 8 employees in total (7 analysts plus manager). They operated in 2 teams of 4. However, taking into account non-working days, holidays and other absences such as sickness, there were often less than 4 people working on a shift. Occasionally there was only one person working on a shift.[57]The tasks carried out by analysts in addition to “triaging” and resolution of incidents are summarised at paragraph 37 of TN’s statement. That evidence is, in the main (but see 53 below) not disputed and for ease I repeat it below (noting that there is a summary of the incident response tasks included at 37.6). 37. In summary, the analysts in the Out of Hours Service Centre undertook the following tasks at the time that the Main Agreement came into force and when I worked in the Service Centre. These are described in more detail at paragraphs 58 -97.37.1 Change and Business Continuity and Disaster Recovery (‘BCDR’) support 37.1.1 These tasks involved sending communications connected to testing of the Smart DCC network. The tasks also included testing customer interfaces.37.2 Reports 37.2.1 These tasks related to the reports that were generated by and for the benefit of the Service Centre.37.3 Smart Meter Key Infrastructure (‘SMKI’) portal checks 37.3.1 These tasks involved an analyst accessing a portal and approving certificates to allow customers to use Smart DCC’s system.37.4 Anomaly Detection Threshold (‘ADT’) incidents 37.4.1 These tasks related to anomalies that had been detected in respect of the volume of smart meter messages that were being made by one of Smart DCC’s customers. Though this tasked was moved over prior to closure.37.5 Phone calls 37.5.1 The phone calls related to remedy and/ or switching incidents.37.6 Remedy incidents37.6.1 Handling remedy incidents was the main task undertaken by the Service Centre. This involved notification, response and/ or resolution of incidents in Categories 1 – 6 reported via phone, email or Smart DCC’s system.37.6.2 The Out of Hours Service Desk triaged any incidents raised by energy suppliers in relation to the smart meter network, via the customer management system or by phone calls or emails. Almost all incidents came via the customer management system. Once an incident was raised, an analyst ensured all relevant information was recorded, performed initial triage via provided work instructions and ran diagnostics on the network. In most circumstances, tickets needed to be assigned to our Service Providers for additional triage to enable resolution.37.6.3 Depending on the severity of the incident, the analyst in the Out of Hours Team then either liaised with the relevant team at Smart DCC, an external team or managed the incident to resolution themselves. However, only incidents in Category 3 – 6 were managed to resolution by the Out of Hours Team.37.7 Switching incidents. 37.7.1 The tasks were per remedy incidents, but were related to people switching their smart meter provider. However, these were logged by a different system.37.8 Service Requests and Work Orders37.8.1 Another part of the role of the analysts on the Out of Hours Service Desk was to handle service requests, which had associated tasks called a ‘Work Order’. A service request is a request from a Smart DCC Customer or Service Provider for information, advice, or access to a service (‘Service Request’). Smart DCC provide a ‘Service Catalogue’ via the customer’s ticket logging system.37.8.2 This Service Catalogue contains many different types of Service Request covering such processes as connecting to the Smart metering network via a gateway connection request or requesting access to DCCKI and SMKI Key infrastructure services.37.8.3 Once a customer raised a Service Request it, in most circumstances, came through to the Service Centre in the first instance to review and action via work instructions. Depending on the complexity of the Service Request, there could be a single or multiple Work Orders which needed to be completed by a SMETS Service Desk Analyst.37.9 Other tasks 37.9.1 The other tasks carried out by the Out of Hours Team (‘Other Tasks’) were:37.9.1.1 Incident lifestyle dashboard – I understand this was a small report done by the Out of Hours Team for the Service Centre.37.9.1.2 Parse and correlate – This refers to checks that were done to make sure that incident tickets had been correctly assigned to the Critical Software Team.37.9.1.3 Major incident email distribution list – The Major Incident Team sent out their own automated communications to an email distribution list from July 2022 onwards. However, the Out of Hours Service Desk prepared a back up email distribution list in case the automated function failed.37.9.1.4 SD to SD Inc and WO Reports Telefonica and DSP – SD means ‘service desk’ and relates to the Smart DCC Service Centre liaising with external service desks of Smart DCC’s Service Providers. WO refers to Work Orders. This task was to prepare a daily report on incident and Work Order volumes.37.9.1.5 Qualtrics/CSAT - CSAT refers to customer satisfaction and Qualtrics was the tool used. The task was to run a report using the tool.[58]There were a couple of small additions to these tasks that Mr Nock agreed on cross examination had been carried out by the OOH team and were then moved to TOC. These were tests on systems called Remedy and SSMI (Self Service Management Interface). These tests were carried out by the OOH team on an occasional basis. I also do not accept the evidence at 37.6.3. Having heard evidence from Mr Stenson and other evidence from Mr Nock I find that the categories of incidents that the OOH team sometimes managed to resolution were categories 3, 4 and 5. I note that is confirmed by the respondent’s amended grounds of resistance at paragraph 9 (page 43).[59]At pages 798 is a table setting out the numbers in each of these categories of incident in January February and March 2024 that were received by the OOH Team. Category 5 is by far the largest. Combined numbers over this 3 month period show 7 category 3 incidents, 20 category 4 incidents and 1,561 Category 5 incidents.[60]At page 811 is one of the documents provided in the days before the hearing. It is a bar chart that shows the numbers of category 5-6 incidents received in the period 1 January to 17 April. I am unable to reconcile the numbers provided in bar charts with the numbers at page 798.[61]I note however that the table at 798 was shared with the claimants as part of an information and consultation process at or towards the end of their employment. They did not object to the picture that table gave at the time and did not raise any concerns about it in their evidence to the Tribunal. Those are the numbers I have considered. Why was the OOH Team set up and why, prior to April 2024, did CBSL maintain the OOH team?[62]Whilst no witness has given evidence directly on this point, having heard and considered all of the evidence about the OOH team, I find that the reason that it was set up was to ensure that those activities that CBSL were obliged to do on a 24-hour basis, were done. If there was no need to maintain these mandatory functions 24 hours a day then, from the evidence heard and considered, there would be no reason for its existence. The Technical Operation Centre (TOC team)[63]The TOC team does not provide services under the 2016 Agreement or any other outsourcing agreement. I categorise this team as a “Smart DCC team”. The employees in the team consider themselves as Smart DCC employees even though, technically, they may be employed by CBSL. Paragraph 38 of TN’s witness statement illustrates this. It says “The TOC was and is staffed by analysts who are Smart DCC employees. It was and is a team that operates on a 24/7 basis.” In his oral evidence TN accepted that this is not strictly accurate as the TOC team members are employed by CBSL.[64]Mr Nock was well placed to give evidence about the work of the TOC team as he was for a period of time, the manager of this team.[65]Some of the tasks that had been carried out by CBSL under the 2016 Agreement started to be carried out by the TOC team. Some tasks moved to the TOC team in February 2024 and some in April 2024. CBSL Internal paperwork relevant to the movement of tasks.[66]CBSL have a standard document which is termed C829 which is form headed “Internal Led Change Request” There are 2 versions of this document in the bundle that are relevant to the changes made in February and April 2024.[67]One version is dated 14 November 2023 and is at 714-718. It includes the following description:- Capita currently run a nights team for Smart DCC which provides a 24/7 service element, this CR is to remove that element. This is a continuation from a conversation with the client and would specifically mean the Capita team managing the Service Centre work in the day (between 8am and 8pm) 7 days a week, and the element we currently do 8pm-8am, 7 days a week, would be taken in house. We currently have specific nights team who work 12-hour nights, 4 on 4 off, so those would be the ones impacted, along with a nights team manager. Client request to take in house the nighttime elements for the SMETS1, SMETS2 and Switching teams, who cover 20:00 – 08:00 7 days per week. We currently have specific nights team who work 12 hour nights, 4 on 4 off, these teams would be the ones impacted, along with the nights team manager. Confirmation received from the Strategic Transaction HR Team that TUPE regulations will apply to this request, confirmed 29/11/23.[68]The bundle also contains an email exchange in late December 2023 between the author of the November C829 (Terry Struggles, Project analyst) (TS) and Lynette Jones ( Head of Incident Management – who has a Smart DCC email address) (LJ). TS to LJ 22/12/23 (page 728) Hi Lynette, Thanks for your patience with this, please find attached the impact assessment to support the transfer of nighttime work from the Capita Service Desk to the Smart DCC. In line with previous updates, the IA is based upon the impacted staff being subject to TUPE regulations and transferring across to Smart DCC. Please review, paying particular attention to the risks and mitigating actions, any questions please let me know. LJ to TS 29/12/23 (727) Hi Terry The Summary of Change appears to be dictating the TUPE decision, when in actual fact; A comprehensive evaluation of the productivity out of hours was concluded revealing minimal activity during those times. Consequently tasks suitable for in hours were identified for relocation, while the remaining small proportion is proposed to be handled in house, It’s important to note that this constitutes a minority of tasks leading to a different stance on the need for TUPE? Can you confirm please ?[69]A response follows on 02/01/24 from a colleague (Scott Johnson) to TS: Good afternoon Lynette, I am by no means an expert in the TUPE field, and respectfully neither is Terry, we took our advice from the HR team who also struggled to get an exact 100% view due to the different places work was moving, so it went to a chap called Gerard Murtagh, who is our TUPE expert. He did offer to join a call to help talk it through if you have someone in mind who would be good to join from your side? He himself mentioned Gaynor Fisher, but I think you said before there was a different HR lead on it for you. Let me know of any available slots and I can reach out to Gerard to keep the traction going on this one. Thanks Scott[70]The view stated by LJ in her email above is consistent with the evidence given in this hearing by Jo Ashton, Deputy Director of Service Enablement at Smart DCC. Paragraph 27 of her statement states as follows. “27. There was a review completed in the final months of 2023, looking into the effectiveness of the Out of Hours Service Desk. This was a Smart DCC and CBSL combined review due to the high cost of the service that CBSL were providing against the value. There were concerns that there was insufficient work to be completed by the Out of Hours Services Desk during their 12 hour shifts and it was an unproductive resource. There was a general perception within Smart DCC that the Out of Hours Team had a lot of unproductive time. Smart DCC needed to ensure this was an efficient use of money. Smart DCC are scrutinised by Ofgem on costs as Smart DCC is paid for by consumers.[71]A later c829 form dated 8 February 2024 is from pages 254. It includes the following:- Summary of the change Smart DCC request to redistribute the nighttime Service Desk work, by moving some tasks in house and others to the day time service desk team. This request impacts the team working from 20:00 – 08:00 7 days per week only, comprising of 1 x Team Manager and 7 x Analysts. Capita and the Smart DCC team have reviewed the request and agree, due to the fragmented nature of the request, that TUPE of the nighttime workers does not apply. Capita will aim to redeploy all nighttime workers on to the day team or a suitable alternative Capita account.[72]It is relevant to note that on the second (and therefore presumably more considered) version of form C829 there is a reference to tasks being moved “in house” Notably of course the view on the position regarding TUPE changes by February 2024 due to the “fragmented nature of the request.” This is not the same reasoning we see in that part of Jo Ashton’s evidence quoted above. The earlier email from LJ does refer to the transfer of a minority of tasks but also references a perceived lack of productivity.[73]The same c829 report also notes (page 256) that the monthly invoice payable by Smart DCC for services under the 2016 agreement will reduce by approximately £30,571 per month. No evidence has been provided as to how this amount has been calculated. Respondent internal paperwork[74]The bundle contains a Smart DCC document called a “DCC Change Authorisation Note.” (268-271). It is dated 11/3/24. It provides a brief description of the change: “This Change shall initiate the removal of the ‘out of hours’ element from the Service Desks for both SMETS and Switching. Smart DCC request to take the majority of the nighttime Service Desk work ‘in house’, this covers the team working from 20:00 – 08:00 7 days per week only, comprising of 1 x Team Manager and 7 x Analysts.” It summarises the reason for proposed change and benefit to DCC. The work has been assessed and it will be more cost-effective for it to be completed ‘in house’ by the DCC TOC Team. Under Summary of Change it states Smart DCC request to take the majority of the nighttime Service Desk work in house, this covers the team working from 20:00 – 08:00 7 days per week only, comprising of 1 x Team Manager and 7 x Analysts. Capita have reviewed the request and H.R have confirmed the nighttime service desk is 100% dedicated to cover the work. As the request will transfer the majority of the work from Capita to Smart DCC, the parties agree that TUPE regulations apply.[75]The terms of this document were at odds with the steps then being taken within CBSL to effect possible redeployments and redundancies of the OOH team on the basis that TUPE did not apply. I refer to this further below. February 2024[76]With effect from February 2024, TOC started to carry out the tasks referred to at paragraphs 37.3 and 37.4 of Mr Nock’s statement. I refer to these as SMKI tasks and ADT tasks. These tasks were therefore moved from the OOH team to TOC ( essentially regarded as a Smart DCC In House team). The SMKI and DCC tasks that the Service Desk carried out during daytime hours also moved to the TOC team. Service, The bundle does not include a C829 form relevant to the removal of SMKI and ADT work from the Service Centre daytime teams. I find that there was no such form.[77]The SMKI and ADT tasks that arose during the night time hours 8pm-8am had to be carried out on that same night time shift. That is why both OOH team and daytime service centre team had carried out these tasks.[78]The given reason for moving these tasks into the TOC team in February 2024 was a stated requirement for employees working on these tasks to have security clearance. I make the following findings:-a. On cross examination, Mr Nock accepted that the need for security clearance for SMKI and ADT work was later revoked. I finds it was.b. There was nothing to OOH team members obtaining security clearance. Mr Nock accepted that and if needed thought it might take a couple of months to be processed.c. I am afraid I find it more than coincidental that there was a change in the stance of CBSL on the C829 forms so that in February the reason for asserting TUPE did not apply moved from the perceived lack of productivity to fragmentation. The move of the SMKI and ADT work into the TOC team predated the larger move of activities by some 2 months ( February not April) but I find it to be all part of the same transaction – to move activities from CBSL’s OOH team “in house”.[79]I also note the relatively low amount of work that the SMKI and ADT work involved. Combined, the work took up about 5.5% of the time of the OOH team. I base this on the claimants’ analysis of time spent (343) and Mr Nock’s evidence.[80]I also note that the transfer of the work from the daytime Service Centre did not generate any change documentation. Which activities moved in April 2024?[81]The claimants’ position is that all of the OOH team’s principal activities moved from OOH team to TOC; activities which they were principally employed to carry out.[82]There is no dispute that some activities moved from the OOH team in April 2024. These activities that moved, were no longer being provided under the terms of the 2016 Agreement. Responsibility for the activities was insourced to Smart DCC.[83]The position of the claimants’ (that I accept) was that the essential out of hours cover for the Network was an activity that transferred. That essential out of hours cover was a service (or part of a service) that had been outsourced under the 2016 Agreement. This activity comprised:a. a standby service between 8pm and 8am; analysts being on standby, ready to deal with incidents that threatened the effective operation of the network. Analysts would be on standby to receive alerts about incidents whether by phone call, email or through a system called Remedy.b. Categorising incidents that arose and then, depending on the severity of the categorisation, taking further notification steps necessary. (See further below on this).c. Change and Business Continuity (BCDR) testing support. Analysts in the OOH team distributed communications to users of the Network to notify them of times (usually a Tuesday) when changes were being made to the network or when tests were being carried out relating to business continuity or disaster recovery. Category 5 incidents[84]Key findings of fact need to be made about category 5. As noted above, category 5 comprised almost all ( in numerical terms) the incidents referred by the OOH shift.[85]It is not in dispute that the management of category 5 incidents to resolution moved to the Service Centre day time team and not TOC. As already noted, that was something that the OOH team did if time permitted. In his supplemental statement, Mr Nock refers to bar charts which were also provided by the respondent in the days before this hearing ( added as pages 807-813). I note particularly paragraph 13 of his supplemental statement: “The data on page 811 of the supplemental Bundle shows the number of interactions that the analysts in total working on the Out of Hours Service Desk had with the tickets in categories 4-6. This excludes ADT incidents which are included on page 807 of the Supplementary Bundle. For example in January 2024 the Out of Hours Service Desk had an average of 9.1 daily touch points with category 4-6 incidents.”[86]To complete the picture, the graph shows 7.2 average daily touch points for February and 6.5 for March.[87]It is difficult to reconcile those daily averages with the other figure provided by the respondent, of[88]The claimants say that a responsibility of the OOH night team was to assess and ensure correct categorisation.[89]The respondent has not provided evidence that category 5 incidents are no longer reported during the hours of 8pm to 8am. I find that, following 17 April 2024, DCC Service users continued to report incidents of all categories (including category 5 incidents) 24 hours day. According to the claimants that would then require the TOC team (on an incident reported during the nighttime hours) to note the report of the incident and check that the categorisation is correct, it would then be left for resolution by the Service Centre. Mr Nock was asked about his and responded that the DCC Service User reporting the incident should apply a category to it. Therefore if an incident was reported and categorised as a category 5 incident then the TOC Team would take no steps. I find that some steps were taken by the TOC team working nights as regards category 5 incidents. That might be as little as checking the categorization. But it will involve some activity. As already made clear, I accept Mr Nock’s evidence that the category 5 incident referrals were “actioned” by the day time team ( paragraph 96 of his first statement and that they were “completed” by the day time team (paragraph 12 of Mr Nock’s supplementary statement) but I do not find that the TOC night team, post transfer, did nothing at all regarding category 4 and 5 incidents.[90]I find that the TOC team working nights, after 18 April 2024, engaged in some activity when a Service User reports an incident. At the very least, that incident will be noted and, if identified as a category 5, then it will be left for resolution by the Day Time Service Centre team. How much time did the claimants spend on these activities?[91]Whilst I am reminded that a percentage of time is not itself a test of assignment, it is a factor to consider ( in terms of the assignment test and determining the organised grouping of employees pursuant to Regulation 3(3)(a)(i).[92]The claimants’ position is that the vast majority of their time was spent on the activities that transferred (they include SMKI and ADT activities in this but primarily this is the transfer of the essential out of hours cover). To support this assertion, they rely on a percentage break down that they produced whilst still in the workplace and in the course of a consultation exercise with their then employer, CBSL. They engaged in a study of tasks carried out when they were told that the TUPE regulations might not apply. Their evidence (which I accept) is that the analysis is for a 3-month period of work. The results are at page 343.[93]There are 3 described activities, each of which is allocated a percentage of 28.19%. These are.a. “Man and Handle Incoming Phone Calls”b. “Monitor and respond to emails relating to major incidents”.c. “Incident management.” (changed to Incident Triage)[94]These are the core activities of the OOH team, those activities for which the OOH team is on standby to ensure that any threats to the operation of the Network are identified and dealt with. That is the claimants’ position.[95]With the addition of another activity called “change Management” (which the claimants say accounted for 8.39% of their time) the claimants’ position is consistent with the content of in an email dated 2 March 2020 from Mr Nock. In his evidence, Mr Nock confirmed this. (page 253). Mr Stenson and Mr Nock also referred to these core activities as being the “regulated tasks” Given Mr Nock’s agreement that all “regulated tasks” transferred I have not tried to identify where each of these tasks is referred to in the Smart Code documentation. I find that all regulated tasks that OOH team had carried out did transfer and it was the non-mandatory tasks that moved to the service Centre daytime team.[96]The claimants have arrived at percentages of 28.19% for each of the 3 activities by a methodology explained below:-a. The other activities in the list require specific items of work. when calculated and added together these activities take up 15.43% of an OOH analyst’s time. (I note that this includes the 8.39% for change management.)b. That leaves 84.57%.c. Varying amounts of this 84.57% of time will be spent on standby, depending on what calls, incidents arise and therefore the time taken to deal with that incident. On some nights the OOH team will be very quiet and less so on others.d. The claimants accept that where time permitted they did carry out work on category 4 and 5 incidents but this was work to support the daytime team not core work. It was not the principal purpose of the night team. The time spent on that work was within such amount of the 85.47% of their time that they spent on standby. There are no percentage figures to assess the extent of this work.[97]I have considered this methodology. It ignores the time that the claimants spent on working category 4 and 5 incidents to resolution. Or rather, the claimant’s accept that time falls within the incident management activity but without being clear how much of that time was given over to incident management. I also note ( and accept) the claimant’s evidence that working on category 4 and 5 claims to resolve them was not a core activity of the team. It was something they did as and when the capacity was there and the extent of time spent therefore fluctuated. It must follow that when assessing the percentage of tie spent on different activities, the must be a percentage of time that the claimants spent on resolving category 5 incidents. I cannot therefore accept in full the result of the claimant’s exercise.[98]It also provides a misleading outcome in relation to phone calls. I do accept the claimants’ position that the core reason for the out of hours team was to be on standby, ready to deal with activities that needed dealing with to ensure that all regulatory requirements were met during nighttime hours. Given the core activity of being on standby, ready to address various categories of incidents, deal, it is inevitable that some time will be spent waiting and watching. In the hearing it was suggested that an analogous situation might be a telephone operator employed to operate an emergency call service. If the number of calls on a particular shift were few (even non-existent) it did not mean that the operator was not spending working time on the service. But in the case of the OOH team, assigning 28.19% of their time to phone calls provides an inaccurate outcome. The OOH team only received on average 10 phone calls a month. I cannot therefore agree with a conclusion that phone calls took up 28.19% of the OOH team’s time.[99]I do note however that the respondent has not provided a figure either. The claimants provided their information during period of consultation and yet there is no evidence of any considered response by CBSL to the claimants’ calculations. In a meaningful consultation exercise this could have led to a further review and an informed response to the claimants’ position. Whilst accepting that at some stage the numbers of different category incidents were shared with the claimants, having read the minutes of the consultation meetings ( pages 734-750) the response to various queries raised by the claimants effectively amounts to a line that TUPE does not apply because only a minority of tasks are transferring and the decision is final. The consultation process did not include any detailed analysis of what was and was not transferring. The minutes of a consultation meeting on 1 March 2024 indicated that the respondents had by then taken up a position that a small minority of tasks were transferring “SJ explained that Capita will continue to do the work in the days team, the small element of work i.e phone calls,, these will move to Smart DCC. There are approximately 10-20 calls received per month on average.” (page 735). This is a misrepresentation of the position.[100]As noted above, evidence about activities was provided by the respondent just a few days before this hearing. But that does not provide any definitive information about percentages either. What it does show is that very few incidents in categories 4 and 5 were managed to resolution by the OOH team (page 811). Which activities did not move to TOC in April 2024[101]Those activities not moving in April 2024 are as follows:-a. the SMKI and ADT work. They had transferred to TOC in February.b. The work carried out in managing to resolution, category 4 and 5 incidents.c. “other tasks” listed by the claimants in their analysis document at page 343 and by Mr Nock in his evidence. According to the claimants’ analysis, these took up about 1.5% of their time. Recruitment into the TOC Team[102]There is evidence of recruitment into the TOC team at around the time that work moved from the OOH team into the TOC team. Permission was given to Mr Nock between October 2023 and January 2024 for 4 new TOC analysts. This recruitment exercise would increase the size of the Team by a third – from 8 to 12. Mr Nock’s evidence was that the move of work from the CBSL OOH team to the TOC team was not the only reason for that recruitment but that it was a contributing factor. There was also a recruitment of 2 more members of the TOC team (shift leads but who carried out the full analyst role). Permission was given for this recruitment in February 2024. Mr Nock’s evidence is that the shift leads were needed because of the increased numbers in the TOC team that the recruitment of 4 analysts meant. They were not recruited because work moved from the OOH team to 12. No evidence was given about whether these new recruits ( or some of them) were recruited into day shifts or OOH shifts.[103]I find that the TOC team increased in size by 6. There may have been other factors relevant to these recruitment decisions but one significant factor was the transfer of work from the OOH team.[104]There is no evidence of recruitment into the Service Centre caused by the move of work from the OOH team. When properly and transparently managed ( to include the provision of information and appropriate levels of consultation) not going to be an issue. Submissions[105]Both parties provided written submissions and also made oral submissions on Friday 18 July 2025. Those submissions have helped inform my findings of fact, identify the relevant law and reach my conclusions.[106]I summarise the submissions below in very brief terms. Respondent’s submissions[107]The respondent’s primary submission relates to the identity of the employer. Those carrying out the services prior to any services moving from the OOH team to the TOC team were CBSL employees and those carrying out services after the move to the TOC team continued to be CBSL employees. As there was no change in employer there cannot have been a relevant transfer.[108]If I do not accept that primary submission, then the respondent says that the activities that are now carried out by the TOC team are not “fundamentally and essentially the same” as the activities that had been carried out by the OOH team. In particular says the respondent, only a fraction of the tasks carried out by the OOH team moved to the TOC team.[109]Further, none of the claimants had a particular task as their principal purpose. All members of the OOH team carried out all of the activities of the OOH team, therefore none of the claimants ( but particularly Mr Stenson as the manager) was assigned to services that did move to the TOC Team. Claimants’ submissions[110]A Service Provision Change (SPC) occurred when the respondent insourced the OOH service and replicated it inside its TOC team. All principal activities transferred to TOC. There was no fragmentation of activities.[111]The argument that the respondent does not employ anyone is “a legal fiction” For example, it has its own HR policies, its own offices (where the TOC team is based) and employees consider themselves as employed by Smart DCC. The CBSL payslip is “the sole outlier.”The Law
[112]Regulation 3 of TUPE provides as follows:- “3. A relevant transfer(1) These regulations apply toa. a transfer of an undertaking business or part of an undertaking or business situated immediately before the transfer in the United Kingdom to another person where there is a transfer of an economic entity which retains its identity ; b. a service provision change that is a situation in which – i. activities cease to be carried out by a person a client on his own behalf and are carried out instead by another person on their client’s behalf a contractor. ii. activities cease to be carried out by a contractor on their client’s behalf (whether or not those activities had previously been carried out by the client on his own behalf) and are carried out instead by another person (a subsequent contractor) on their client’s behalf ; iii. activities ceased to be carried out by a contractor or a subsequent contractor on a client’s behalf (whether or not those activities had previously been carried out by the client on his own behalf) and are carried out instead by the client on his own behalf. and in which the conditions set out in paragraph 3 are satisfied.(2) In this regulation “economic entity” mans an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary. (2A) References in paragraph 1(b) to activities being carried out another person (including the client) are to activities which are fundamentally the same as the activities carried out by the person who has ceased to carry them out.(3) The conditions referred to in paragraph 1b are thata. Immediately before the service provision changei. 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; ii. The client intends that the activities will, following the service provision change, be carried out by the transferee other than in connection with a single specific event or task of short-term duration; b. The activities do not consist wholly or mainly of the supply of goods for the client’s use. ……………………………….. (6) A relevant transfer (a) may be effected by a series of two or more transactions; and (b) may take place whether or not any property is transferred to the transferee by the transferor. Burden of proof[113]Where, as here, there is a dispute about whether there was a relevant transfer, the burden of proof is on the claimants (Secretary of State for Employment v. Cohen and Beaupress [1987] IRLR 169). I also note from paragraph 17 of this EAT decision, that employment tribunals cannot expect too much of claimants either. “An employee can do no more than tell the [Employment] Tribunal of what is within his own knowledge. That is what Mr Cohen did. It was within his knowledge that his employment had continued in the same place, under the same directors, with the same customers and the same stock being used. All of those incidents of his continuous employment are consistent with there having been a transfer of business. If there was no other evidence, they justify the inference of transfer.” SPC – Regulation 3(1)(b)[114]The first step in determining whether there has been an SPC is to identify the relevant activity/activities (Kimberley Group Housing Limited v. Hambley [2008] ICR 1030 at para 27). I note the following:-a. That the activities before and after alleged transfer, must be fundamentally the same (Regulation 3(2A) above)b. The term “activities” should be given its ordinary everyday meaning (as should the whole definition of SPC) (Arch Initiatives v. Greater Manchester West NHS Foundation Trust EAT/0267/15 at para 2).[115]As for the activities remaining fundamentally the same. I note the following passage from the EAT decision in Johnson Controls Limited v. Campbell and anor UKEAT 0041/12: “Those activities must remain fundamentally the same although that does not mean that they have to be identical. An activity may be more than the sum of the tasks that are performed in respect of that activity, but a Tribunal must be careful to ensure that it does not take so narrow a view of that which “activity” consists of, in the case before it, as to forget that the context in which it decides “activity” is the context in which it is ever likely that employees’ continued employment will be affected. If for instance the activity performed by a given employee is after a service provision change to be performed by two or three employees in the transferee or, in a 3(1)(b)(iii) situation, by the client itself, then it may well be that the approach of the Tribunal should recognise that the same activity may well be carried on, though it is performed now by three people rather than by the one person who earlier performed it. These questions are, however, fundamentally questions of fact and degree.”[116]If the activities are divided up between providers then they may become too fragmented for an SPC to apply. (see for example Clearsprings Limited v. Ankers UKEAT/0054/08).[117]Ms McGrady referred to the following authorities which provide guidance on the meaning of the term “principal purpose.”a. Argyll Coastal Services Limited v Stirling UKEATS/0012/11 (Argyll)b. Amaryllis Limited v. McLeod UKEAT/0273/15 (Amaryllis)c. Tees Esk & Wear Valleys NHS Foundation Trust v Harland (Tees)d. Edinburgh Home Link Partnership v. City of Edinburgh Council UKEATS/0061/11.(Edinburgh)[118]I take the following guidance and instruction from these authorities:-a. Carrying out the activities on behalf of a client need not be the sole purpose of the organised grouping but it must be the dominant purpose. (Argyll).b. The activities actually performed by the organised grouping might be relevant to determine the principal purpose of the grouping. (Tees).c. The intention behind the organisation of the grouping might be relevant when identifying its principal purpose. (Tees).d. A Tribunal must consider the position immediately before the change in provider when deciding whether there was an organised grouping who satisfied the requirements of regulation 3(3)(a)(i) (Amaryllis).[119]The term “organised grouping of employees” was considered in Seawell Limited v. Ceva Freight [2013] IRLR 726 (Seawell). I note the following extract from the decision of the Court of Session (paragraph 30): “ Having thus identified the scope and nature of the activities, the focus must then pass to the manner in which the contractor has arranged for the performance of the service prestations, or, perhaps more technically, reflecting the wording of the Regulations, how the activities are 'carried out'. Plainly, in very many cases the employees engaged in providing the services to the client who (in the present variety of service provision change) takes the services 'in house' will also be providing services to other clients or customers. The extent to which their working time is devoted to the client will vary greatly. Accordingly, for obvious reasons, the notion that there be a transfer of their contracts of employment would be vested with much uncertainty. Hence one finds the requirement in para. (3)(a)(i) of reg. 3 that there be an 'an organised grouping of employees' having as its 'principal purpose' the carrying out of the activities in question. The requirement is necessary in order to give practical definition – or to set discernible parameters – to the important event, from the perspectives of each of the contractor, the client (the potential transferee) and the employee, of a transfer of the contract of employment.[120]Ms McGrady also referred me to Enterprise Management Services Limited v Connect Up Limited UKEAT/0462. I note the following guidance from paragraph 8 of the judgment; guidance derived from various earlier appellate decisions including those referred to above. From that learning I derive the following principles to be applied when considering the reg. 3 SPC provisions in the present case:(1) The prospective SPC in this case arises under reg. 3(1)(b)(ii) , that is where ‘activities’ cease to be carried on by a contractor (here, Enterprise) on a client’s (LCC) behalf and are carried on instead by a subsequent contractor (Connect).(2) The expression ‘activities’ is not defined in the Regulations. Thus the first task for the Employment Tribunal is to identify the relevant activities carried out by the original contractor: see Kimberley , para. 28; Metropolitan , paras. 29–30. That was the issue on appeal in OCS where the appellant’s challenge to the activities identified by the Employment Tribunal failed.(3) The next (critical) question for present purposes is whether the activities carried on by the subsequent contractor after the relevant date, here 1 April 2009, are fundamentally or essentially the same as those carried on by the original contractor. Minor differences may properly be disregarded. This is essentially a question of fact and degree for the Employment Tribunal ( Metropolitan , para. 30).(4) Cases may arise (e.g. Clearsprings ) where the division of services after the relevant date, known as fragmentation, amongst a number of different contractors means that the case falls outside the SPC regime, as explained in Kimberley (para. 35).(5) Even where the activities remain essentially the same before and after the putative transfer date as performed by the original and subsequent contractors an SPC will only take place if the following conditions are satisfied: (i) there is an organised grouping of employees in Great Britain which has as its principal purpose the carrying out of the activities concerned on behalf of the client; (ii) the client intends that the transferee, post-SPC, will not carry out the activities in connection with a single event of short-term duration; (iii) the activities are not wholly or mainly the supply of goods (rather than services) for the client’s use. See reg. 3(3) . (Neither of (ii) and (iii) arise in this case.)(6) Finally, by reg. 4(1) the Employment Tribunal must decide whether each Claimant was assigned to the organised grouping of employees.[121]Ms McGrady also referred me to authorities that provide guidance on the term “Activities” including Arch Initiatives v. GM West Mental Health NHS Foundation Trust UKEAT/0267/15. I have considered this judgment. Assignment[122]The ECJ in Botzen and others v. Rotterdamsche Droogdak Maatschappij BV 1986 2CMLR 50 decided that “An employment relationship is essentially characterised by the link existing between the employee and the part of the undertaking or business to which he is assigned to carry out his duties. In order to decide whether the rights and obligations under an employment relationship are transferred …… it is therefore sufficient to establish which part of the undertaking or business the employee was assigned.”[123]The test of assignment needs to be applied to circumstances involving a SPC even though, for an SPC, the Tribunal needs to identify an organised grouping of employees pursuant to Regulation 3(3)(a)(i). On this point Ms McGrady referred me to Edinburgh Home-Link Partnership v. City of Edinburgh Council EATS 0061/11 (Edinburgh case). This case concerned 2 closely related organisations , one of which (“HOP”) provided services supporting rough sleepers and hostel dwellers and the other (HomeLink (HL) provided services giving support to vulnerable people in relation to housing matters. The services provided by HL were delivered under an outsourcing agreement with the Local Authority.[124]The Local Authority decided to insource the services that had been provided Two individuals worked for both organisations under 2 separate contracts of employment. The Employment Tribunal decided that, whilst there were notionally 2 contracts of employment, they were effectively carrying out the work for both organisations contemporaneously. Working days were not divided between one role and another. Furthermore, the role of one of the employees involved strategic matters relating to the organization (HL) rather than work on the services being provided under the contract. The EAT decided that whilst there was an organized grouping of employees whose principal purpose was the delivery of the services being insourced, neither claimant was assigned to that organised grouping. Their duties included ones for the closely related employer as well as strategic duties relevant to HL as an organisation and not specific to the transferring services. Neither claimant was assigned to the services transferring.[125]The issue of assignment is different from the issue of identifying an organised grouping of employees (Edinburgh case – above as well as LB Hillingdon v. Gormanley and others EAT 0169/14).[126]Assignment cannot necessarily be determined by reference to time spent alone. (see for example Buchanon Smith v. Schleicher and Co International Limited EAT 1105/94). We also note the extract from the case of Duncan Web Offset ( Maidstone) Limited v. Cooper and others, quoted in the EAT’s decision in the Edinburgh Council case: “There will often be difficult questions of fact for industrial tribunals to consider when deciding who was ‘assigned’ and who was not. We were invited to give guidance to industrial tribunals about such a decision, but declined to do so because the facts will vary so markedly from case to case. In the course of argument a number were suggested, such as the amount of time spent on one part of the business or the other; the amount of value given to each part by the employee; the terms of the contract of employment showing what the employee could be required to do; how the cost to the employer of the employee’s services had been allocated between different parts of the business. This is, plainly, not an exhaustive list….” Timing of alleged transfer[127]In Celtec v. Astley 2005 ICR 1409, the ECJ decided that a relevant transfer must take place at a particular time rather than over a period of time. Even so, a transfer can be brought about by a series of transactions (TUPE Regulation 4(3)) giving rise to a transfer at a particular time.[128]Commenting on Astley, the EAT in Metropolitan Resources Limited v. Churchill Dulwich Limited and others UKEAT 0286/09 noted “The Tribunal, in a case in which the date of the alleged transfer is in issue, must, in my judgment, determine the date at which the essential nature of the activity carried on by the alleged transferor ceases to be carried on by him and is instead carried on by the transferee. The ascertainment of that date must be a question of fact.” Automatic transfer of employment[129]Regulation 4 of TUPE provides that where there is a relevant transfer, then the transfer of employment of assigned employees is automatic, accept where objection has been made under regulation 4(7) (a provision that is not relevant to this case). “Except where objection is made under paragraph 7, a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to the relevant transfer which would otherwise be terminated by the transfer but any such contract shall have effect after the transfer as if originally made between the person so employed and the transferee.” Discussions and conclusions[130]Before addressing the issues identified, I set out my conclusions about the respondent’s primary position – that there was no change in employer and therefore cannot be a relevant transfer. The employees who carried out activities before the OOH team was closed in April 2024 were CBSL employees and the employees who carried out activities following closure were also CBSL employees (whether in the Service Centre or the TOC Team).[131]I do not accept that the employment by CBSL of employees both before and after the closure of the EEH Team prevents a relevant transfer. These are my reasons:-a. The respondent had outsourced services, under the 2016 Agreement, to CBSL.b. The respondent decided that some of those services should no longer be carried out under the 2016 Agreement. Activities ceased to be carried out by CBSL on the respondent’s behalf.c. The respondent decided that it would be directly responsible for the services that were no longer to be carried out by CBSL.d. The circumstances identified at regulation 3(1)(b)(iii) therefore applied.[132]To be clear, that in itself does not mean that there was a SPC, all it means is that the facts of this case have the potential to be a SPC. But the other parts of the test at regulation 3 have to be met.[133]If those other parts of the test are met, then the transfer of employment from transferor to transferee is automatic under regulation 4(1). Parties are unable to contract out of that statutory provision requiring an automatic transfer of employment.[134]There is nothing to prevent contracts of employment of employees whose employment transfers automatically from a transferor to a transferee subsequently moving to another employer by another mechanism. That might happen immediately following a transfer, particularly in a corporate group setting where one company within a group is, or tends to be, the employer. But my task in this preliminary hearing is to decide whether or not there was a relevant transfer. The fact that CBSL subsequently employed the employees who carried out activities that the OOH team had been carrying out does not in itself prevent a relevant transfer. Issue One 1. Was the insourcing of some of the activities that had been done by the night /out of hours service to the Respondent a service provision change within the meaning of section 3(1)(b) of Regulation 3 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE)? To determine this, the following will be considered:a. Are the activities carried out by the Respondent fundamentally the same as the activities that had been carried out by CBSL? (TUPE Regulation 3 section 3(2A)); andb. Immediately before the service provision change was there an organised grouping of employees situated in Great Britain which had as its principal purpose the carrying out of the activities concerned on behalf of the Respondent (TUPE Regulation 3 section 3(a)(i))? Response to 1a.[135]As was made clear in Enterprise, the first step is to identify the activities that transferred. In doing so it is also helpful to identify activities that did not transfer. I have done that. See my findings of fact above (76-83 and 101).[136]The activities that are now carried out by the respondent are fundamentally the same as the activities that had been carried out by CBSL. The respondent’s team that carries out the activities (TOC Team) is a different one to the OOH team. The activities that moved were absorbed into a wider workload that the TOC team has (particularly the shifts working 8pm to 8am) but the activities themselves are the same.[137]As identified in my findings of fact, not all activities undertaken by the OOH team moved to the respondent. Some continued to be provided by CBSL under the 2016 Agreement. But those that did move remained fundamentally the same activities. Response to 1b[138]The OOH team was an organised grouping of employees. The key issue is whether the principal purpose of that organised grouping was the carrying out of those activities that the respondent was carrying out and that CBSL had been carrying out before 18 April 2024.[139]I have decided that the principal purpose of the OOH Team was to carry out those activities that were required for the respondent to meet its regulatory obligations during the hours of 8pm to 8am, 365 days a year. These are my reasons:-a. Both claimants and respondent accept those activities as the OOH teams “core activities”b. The activity that the respondent relies on particularly to show that the core activities were not the principal purpose of the OOH team is the activity of resolving category 4 and 5 incidents. It was accepted that this was not a core activity for the OOH team. The OOH team were not required to resolve all ( or a particular percentage) of the category 4 and 5 incidents. There is no evidence of any requirements in this regard being applied which, in an outsourcing business such as CBSL is surprising if this was a key element of the duties of the OOH team.c. The evidence provided a few days before this hearing shows very few such activities being managed to resolution by the OOH team prior to the alleged transfer.d. As I make clear in my findings of fact, the activities that transferred as part of the same transaction ( albeit 2 months earlier) included the SMKI and ADT activities. Issue 2 If so, were the claimants assigned (within the definition at regulation 2 of TUPE) to the service that transferred and did their employment transfer to the Respondent by operation of law, pursuant to Regulation 4? Response to 2.[140]The respondent’s particular challenge to this point appears to relate to Mr Stenson the team leader (noting particularly the Edinburgh case).[141]I have first considered the position of the other claimants, all of whom were analysts with the OOH Team. I am satisfied from the findings of fact made, that they were assigned to the transferring services. The OOH team was there to maintaining the 24-hour service in order to meet its regulatory/Licence requirements. All analysts were assigned to that activity. That is what they spent the majority of their time doing.[142]I was not provided with copies of the claimants’ employment terms but I note that they were specifically and permanently assigned to the OOH shifts .[143]That leaves Mr Stenson, the team leader. Mr Stenson was also assigned to the services in the same way as the other members of the OOH team. His responsibilities included managing the team, but all members of the team were assigned to the services. Employees working on the services post transfer will require team leadership. Mr Stenson also participated in the delivery of the transferring services. That fact that he ( like other members of the OOH team) also worked on some category 4 and 5 incidents to resolution did not prevent their assignment to the transferring services. Issue 3 If there was a relevant transfer, what was the date of this transfer? Response to 3.[144]The date of the transfer was 18 April 2024. Whilst some activities had moved over 2 months earlier that was all part of the same transaction which completed on the transfer of the activities on 18 April 2024. Approved By