Mr S Hodson and Others v Transvalair (UK) Ltd and AHK Designs Ltd: 4106848/2023 and Others

EMPLOYMENT TRIBUNALS (SCOTLAND)

Case No 4106848/2023

Venue Glasgow

Hearing 17, 19 & 20 June 2025

Between

Mr S Hodson & others as per attached scheduleClaimant

Transvalair (UK) Ltd and AHK Designs LtdRespondent

Before

Employment Judge L Doherty

Mr G Ridgeway (instructed by Counsel) for respondent

Mr R Bradley (instructed by Counsel) for respondent

Date 26 June 2025

JUDGMENT

The Judgment of the Tribunal is that there was no relevant transfer under Regulation

[3](1) (a) or 3 (1) (b) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

REASONS

[1]This was a multiple claim brought under a number of jurisdictions following the termination of the claimant’s employment. There is an issue as to whether the claimant’s employment was subject to a transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) between the first and second respondent. This Preliminary Hearing (PH) was fixed to determine that issue.

[2]The first respondent was represented by Mr Ridgeway and the second respondents by Mr Bradley, both counsel. A number of claimants attended by Cloud Video Platform (CVP), it having been agreed in advance that the claimants would not give evidence. It had also been agreed in advance of the PH that the claimants would not require to cross examine the witnesses, however the claimants in attendance were advised at the commencement of the PH that if that position changed, they should advise the Tribunal.

The issues

[3]The parties had produced an agreed list of issues, however this is not one by which this Tribunal is bound. In summary the first respondents’ position is that there was a was a business transfer under Regulation 3(1)(a) of TUPE and /or a transfer under the service change provisions in terms of Regulation 3(1)

(b) (i) (ii) and (iii) of TUPE. All of these positions are disputed by the second respondent. The issue for the Tribunal is whether either section 3 (1) (a) or 3 (1) (b) (i), (ii) or (iii) of TUPE is engaged.

The hearing

[4]For the first respondents, evidence was given by Steven Morris, their Managing Director. A witness statement was produced from Peter Alfred, the first respondent’s (R1) Operations Director.

[5]For the second respondent (R2), evidence was given by Aamir Khurshid, the Director and owner of the second respondents and by Adeeb Aziz, an employee of Giomani Designs Ltd and a Director of Premier Services and Products Ltd.

[6]Evidence was given by witness statements which were taken as read.

[7]The parties produced a joint bundle of documents. Findings in fact

[8]The first respondents ( referred to as ‘TVA’) are a haulage company operating across the UK, specialising in freight forwarding and two-man delivery.

[9]Prior to the end of September 2023, they been providing final mile delivery services for Victoria Plum Ltd (VP) , an online retail bathroom supplies. Delivery is a very important element of an online retail business.

[10]TVA had provided this service for eight years to VP under a dedicated contract. TVA entered into a Logistics and Fulfilment Agreement with VP in 2002 (the Contract) , which was an extension of the original contract entered into . The service TVA undertook to provide to VP was detailed in Schedule 1 to that contract.

[11]TVA delivered products for VP from Tuesday to Saturday using a dedicated fleet. This fleet was solely used for VP’s deliveries, handling between 500 and 800 deliveries daily on average daily. To ensure nationwide coverage for VP’s e-commerce products, TVA established dedicated delivery hubs in Crawley, Ipswich, Gateshead, Glasgow, and Bristol. These sites enabled TVA to manage approximately 70% of VP’s UK delivery volume and covered 80% of the country geographically. VP also operated three of its own sites in Peterborough, Doncaster, and Warrington, which handled the remaining delivery volume.

[12]All deliveries managed by TVA utilised VP’s proprietary software platform, Maxoptra, in order to ensuring efficient coordination and tracking of deliveries and enabling a customer support service.

[13]All 11 claimants and 59 employees in total worked on the VP contract for TVA. The 11 claimants spent over 75% of their time working on this contract.

[14]VP used another haulage company, Mark Thompson Transport, in addition to TVA for their deliveries. VP also operated three of its own sites in Peterborough, Doncaster, and Warrington, which handled the remaining delivery volume.

[15]VP was experiencing severe financial difficulties during 2023 and was on the cusp of administration. Around the middle of September 2023, Ernst and Young were appointed. They contacted a number of potentially interested parties to seek offers for the business assets. Giovanni Designs Limited (Giovanni) was one of the 37 parties approached by Ernst and Young.

[16]In September 2023, the second respondents ( referred to as AHK) were trading as a small entity. Giomani was a longer established business owned by other members of the same family as Mr Khurshid, the owner of AHK. Neither company had any prior involvement with VP.

[17]AHK submitted a bid for VP.

[18]On Friday 29 September 2023, VP went into administration. On the afternoon of 29 September, AKH found out that their bid was potentially going to be successful. An agreement (the Agreement) relating to the sale and purchase of the business and certain assets of VP was entered into between VP Ltd, in Administration, the Administrators as individuals, AHK, and Giomani, with Giomani acting as guarantor.

[19]Completion of the deal occurred at around 8pm on the evening of 29 September 2023. The purchase price was £7.8 million, with a retention of £1.3 million for a six month period. The deferred consideration and other obligations of AHK under the sale agreement were guaranteed by Giomani.

[20]The bulk of the purchase price was for the website and branding of VP. The breakdown of the purchase price was as follows:• Business IPR including the trading name and website domain name£6,300,000;

• Stock £1,449.996;

• Equipment - £50,000;

• WIP £1;

• Contracts £1;

• Customer list £1; and

• Sellers records £1.

[21]VP’s debtors, cash and cash in transit were excluded from the sale.

[22]VP was sold as a going concern. All VP employees, including the directors of VP, transferred to AHK under TUPE. There was no prior consultation about the TUPE transfer . An email was sent on the evening of Friday 29 September 2023 to all VP employees advising them of the sale and that their employment would transfer over to AHK.

[23]Immediately after the acquisition of VP, anything which was on lease or subject to a finance agreement had to be renegotiated by AHK. All services and suppliers’ contracts had to be re-sourced. These did not novate automatically to AHK.

[24]AHK agreed with the Administrators as part of the Agreement that they would honour some existing customer orders. Barclaycards had an agreement with the administrators to confirm all orders would be fulfilled and these orders were dispatched from 24 October 2023 onwards.

[25]Any issues with pre-existing customers, returns etc were to be handled by the Administrators.

[26]On 30 September 2023, TVA was unaware of the fact that VP had gone into administration or that it had been acquired by AHK. They had collected goods from VP which they delivered on the 30 September At 5pm, Mr Svenson, who had been the VP Operations director who was TVA’s contact, telephoned TVA and advised them that VP had gone into administration.

[27]Mr Khurshid had arranged a meeting with the VP Directors who had TUPE transferred to AHK on the afternoon of 30 September 2023. He was unaware that TVA were carrying out deliveries on 30 September 2023. He asked Mr Svenson to contact TVA to advise them that AHK had acquired the business. After this contact TVA did not carry out any more deliveries.

[28]TVA sent an invoice to the Administrators on 2 October 2023 for £20,803.92 in respect of the delivery costs incurred on 30 September 2023.

[29]On 3 October 2023, TVA sent layoff letters to staff whom they considered were affected by VP’s administration. The letter told staff they remained employees of TVA.

[30]By 5 October 2023, AHK had not contacted TVA. A telephone call took place on 6 October 2023 between Mr Morris, Mr Alfred and Mr Svenson, during which Mr Svenson indicated that AHK wanted to engage with TVA in order to start deliveries on 12 October 2023.

[31]After 29 September 2023, AHK had a sales the website live again in a day or two and planned to start deliveries on 10 October 2023.

[32]Negotiations between TVA and AHK took place between around 5 to 10 October 2023 but were ultimately unsuccessful. TVA offered AHK less favourable terms that had been offered to VP, which AHK were not prepared to accept. A telephone call took place between Mr Morris and Mr Khurshid on 9 October 2023 in which Mr Morris expressed his disappointment at the situation. He expressed the view that TVA were integral to VP. He sought payment for the deliveries which had taken place on 30 September 2023. Mr Khurshid advised him this was nothing to do with AHK, but related to the contact TVA had with VP. Mr Morris said that TUPE applied but Mr Khurshid disputed this.

[33]AHK instructed another haulage company, Premier Deliveries, who delivered for Giomani Designs to carry out deliveries.

[34]The administrators’ statement of proposal of 5 October 2023 ranked debts incurred by VP as unsecured claims. AHK was ranked as an unsecured creditor of VP in Administration in the sum of £200,000.

[35]On 17 October 2023, TVA sent AHK information about staff whose employment they considered had transferred to them under TUPE. TVA sent letters to members of their staff whom they considered had TUPE transferred to AHK advising them of this. Note on Evidence

[36]There were no significant disputes on the relevant facts, albeit there was a considerable disagreement between the parties as to how matters should be interpreted.

[37]The Tribunal found all of the witnesses to be generally credible and reliable; their evidence was generally not inconsistent with the documentary evidence and all the witnesses were able to make appropriate concessions.

[38]There was one point of credibility taken in relation to Mr Khurshid’s credibility. It was suggested to him that he was aware that TVA were carrying out deliveries on 30 September 2023 and deliberating engineered matters so that so that TVA were not advised about the administration of VP until after the deliveries had been completed.

[39]The Tribunal found Mr Khurshid’s denial of this to be credible. It was plausible that, as he explained, following the speed and timing of the sale at 8pm on Friday evening, he endeavoured to get the VP directors who had transferred to AHK to a meeting in Saturday and that at that time he was unaware of the fact that deliveries were being undertaken by TVA. Following the Saturday meeting, he asked the Operations Director, who had had been VP’s contact with TVA to contact them and tell them about the acquisition. Submissions

[40]Both parties presented written submissions which they supplemented with oral submissions. In the interests of brevity these are not repeated here but are referred to below where relevant.

[41]The following list of cases was provided:• Mansfield Care Ltd V Newman

(2004) IRLR 902

;

• Cheesman v R Brewer Contracts ltd

(2001) IRLR 144

;

• Spijkers v Gebroeders Abattoir CV

(1986) 2 CMLR 292

;

• Oy Liikenne AB v Liskojarvi (c-172/99) (200) IRLR 171;

• Numast v P&O Scottish Ferries ltd

(2005) ICR 1270

;

• Scottish Coal Co Ltd v Crouch Mining ltd 2006 S.C 105;

• Metropolitan Resources Ltd v Churchill Dulwich ( 2009) ICR138];

• Key2 Law LLP v De’Antiquis

(2012) IRLR 212

;

• CT Plus (Yorkshire) CIC v Black & Ors UKEAT/0035/16D;

• Taurus Group Ltd v Crofts and another (

UKEAT/0024/12

);

• McCarrick v Hunter (2013 ) IRLR 26;

• Eddie Stobbart v Moreman

(2012) ICR 919

;

• Ceva Freight (UK) Ltd v Seawell Ltd (2013) CSIH 59 2013 SC 596;

• FNV v Smallsteps (2017) ECLI:EU;C; 2017;489;

• Snr Denton UK LLP v Kirwan and another

(2012) IRLR 966

;

• Horizon Security Services Lts v Ndez

UKEAT/0071/14

/505; and

• Jinks v London Borough of Havering EAT 015714.

Consideration

[42]The parties produced an agreed List of Issues (LOS). While the Tribunal is not bound by this as it were not agreed by the Tribunal, it is referred to where relevant.

[43]The question for the Tribunal is whether there was a relevant transfer between the R1 and R2 in terms of Regulation 3 (1) (a) of TUPE and /or if there was a relevant transfer in terms of Regulation 3 (b) (i), (ii), or (iii) of TUPE.

[44]Regulation 3 of TUPE provides: 3.—(1) These Regulations apply to— (a) 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 the client’s behalf (“a contractor”); (ii) activities cease to be carried out by a 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 another person (“a subsequent contractor”) on the client’s behalf; or (iii) activities cease 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” means 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 instead by 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 (1)(b) are that— (a) immediately before the service provision change— (i) 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; and (b) the activities concerned do not consist wholly or mainly of the supply of goods for the client’s use.

[45]Regulation 4 of TUPE (2) provides: 4.—(1) 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.

(2) Without prejudice to paragraph (1), but subject to paragraph (6), and regulations 8 and 15(9), on the completion of a relevant transfer— (a) all the transferor’s rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this regulation to the transferee; and (b) any act or omission before the transfer is completed, of or in relation to the transferor in respect of that contract or a person assigned to that organised grouping of resources or employees, shall be deemed to have been an act or omission of or in relation to the transferee.

(3) Any reference in paragraph (1) to a person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to a relevant transfer, is a reference to a person so employed immediately before the transfer, or who would have been so employed if he had not been dismissed in the circumstances described in regulation 7(1), including, where the transfer is effected by a series of two or more transactions, a person so employed and assigned or who would have been so employed and assigned immediately before any of those transactions. Business Transfer – Regulation 3 (1) (a) TUPE

[46]The Tribunal began by considering if there was a business transfer under Regulation 3(1) (a). The issue identified in the LOS is ‘was there the transfer of an economic entity from R1 to R2 which retained its identity?’

[47]There is no dispute that there was a transfer to which Regulation 3(1) (a) of TUPE applied between VP Ltd in Administration ( the transferor) and AHK (the transferee). It is not in dispute that AHK continued to carry on the business of online retail sale of bathroom products. The employees of VP transferred to the AHK under TUPE. Given that that this is the case, the tribunal agree with Mr Bradly that Mr Ridgeway’s submissions as to the effect of the insolvency provisions (8) and (9) in the TUPE Regulations lacked relevance. It was agreed at the commencement of the PH by Mr Ridgeway that Regulation 8(7) was not applicable.

[48]It was Mr Ridgway’s position however that there was a relevant business transfer between TVA as the transferor, and AHK as the transferee. That is not accepted by AHK.

[49]In considering this question, the Tribunal started by considering the guidance in Cheesman and firstly considered whether part of TVA’s business which carried out deliveries for VP was capable of amounting to an ‘economic entity’.

[50]The Tribunal took into account that TVA delivered products for VP from Tuesday to Saturday using a dedicated fleet; that fleet was solely used for VP’s deliveries, handling between 500 and 800 deliveries daily on average daily; that TVA had established dedicated delivery hubs in Crawley, Ipswich, Gateshead, Glasgow, and Bristol, which enabled them to manage approximately70% of VP’s UK delivery volume and covered 80% of the country geographically; that all deliveries managed by TVA utilised VP’s proprietary software platform, Maxoptra; and that 59 employees in total worked on the VP contract for TVA.,

[51]These factors are suggestive of an organised grouping of resources which has the objective of pursuing an economic activity. There was a dedicated fleet of vehicles operating out of dedicated delivery hubs, to which drivers were at least in part assigned, and the Tribunal was persuaded that this was capable of amounting to an identifiable economic entity.

[52]The crucial question is, however, was that was an economic entity which retained its identity following the transfer.

[53]Both parties referred to the guidance in Cheesman and Spijkers on this point. The Tribunal reminded itself that order to consider whether that retention of identity has occurred, following Spijkers, and Cheesman, it is necessary to take account of all the factual circumstances of the transaction in question’, including but not necessarily limited to:• the type of business or undertaking;

• the transfer or otherwise of tangible assets such as buildings and stocks;

• the value of intangible assets at the date of transfer;

• whether the majority of the staff are taken over by the new employer;

• the transfer or otherwise of customers;

• the degree of similarity of activities before and after the transfer, and

• the duration of any interruption in these activities.

[54]Mr Ridgway added to this list:• the Value of TVA’s intangible assets at the time of the alleged transfer.

• whether goodwill had been transferred; and

• the use of TVA employees by AHK

[55]The Tribunal keep in mind that no one factor is decisive.

[56]It was agreed that no assets transferred between TVA and AHK. There was no evidence to support the conclusion that any assets, tangible or intangible transferred from TVA and AHK.

[57]The Tribunal concluded that no employees of TVA become employed by AHK. Mr Ridgeway’s submitted that AHK stepped into the shoes of VP as a result of the acquisition of VP , which was as a result of a pre pac, the purpose of which is to keep the business alive. He submitted that FNV v Smallsteps supported the position that in the event of a pre pac sale aimed at rescuing all or part of an insolvent company as a going concern, the employees are entitled to full protection of the Acquired Rights Directive, implemented in the UK by TUPE.

[58]That, however, is what happened here. The employees of VP transferred under TUPE to AHK. In distinction to that TVA provided services to VP in terms of the Contract, which did not transfer from VP to AHK.

[59]Mr Ridgeway’s submissions as to the effect of Smallsteps on service provision change are dealt with below.

[60]Mr Ridgway submitted that goodwill had transferred, however there was no evidence of goodwill transferring from TVA to AHK. Reference to TVA’s belief that they achieved good Trust Piolet scores is not evidence of good will transferring.

[61]There was no evidence that customers transferred. TVA’s customer in terms of the Service Agreement was VP. There was unchallenged evidence from Mr Khurshid that the Service Agreement did not novate to AHK. It was not part of TVA’s case that the contract between VP and TVA transferred to AHK. The fact that this is the case is underlined in that that TVA sought to negotiate new terms and conditions with AHK.

[62]There was no evidence to support a conclusion that individuals to whom deliveries were made on 30 September were customers of TVA who transferred to AHK.

[63]The Tribunal also considered the period for which activities were suspended or disrupted.

[64]There was evidence that AHK required a delivery service for their online business, however there was nothing to suggest that they carried this out the 70% of VP deliveries which TVA had undertaken themselves. AHK anticipated deliveries would resume by 10 of October and at some point, deliveries did resume, however there was no evidence to support the conclusion that this was work which AHK caries out itself; rather the evidence of AHK’s witnesses was that Premier Delivery were instructed to carry out deliveries.

[65]AHK carried on the activities of VP as on online retail business and therefore carried on similar activities to VP, but this activity was not as a freight company. Delivery of goods was an essential part of VP and AHK’s operation but it was contracted out to a service provider at some point. The activities carried out by TVA ceased on 30 September 2023.

[66]The Tribunal considered Mr Ridgeway’s submission that AHK had used TVA’s employees. TVA carried out deliveries on 30 September 2023, after the sale to AHK under the Agreement.. Mr Ridgeway submitted that crucially AHK used employees of TVA to further the activities and continue with deliveries without notifying TVA of the ‘true situation’ until 5pm. This, he suggested, was deliberate. For the reasons given in the Note on Evidence above, the Tribunal did not conclude that this was the case. AHK did not instruct TVA to carry out the deliveries. At the point when deliveries were being carried out TVA believed that they were providing a service to VP, which is underlined by the fact that they invoiced the Administrators for the work done. As soon as AHK informed TVA of the situation, the activity stopped.

[67]Mr Bradely acknowledged that a transfer can occur absent the transfer of assets. He referred to Scottish Coal; Oy Liikenne; and Nutmast dealing with the transfer of assets, but pointing out that importantly in all three cases employees became employed by the alleged transferee, which was not the case here. He submitted that in this case nothing transferred.

[68]Looking at the factors present in this case, the Tribunal concluded that in the absence of the transfer of any assets, the transfer of any of employees and , the transfer of the Contract , and the lack of similarity of the activities between the AHK and the economic entity which is said to have transferred, it could not be concluded that there was a transfer of an economic entity which retained its identity and therefore the Tribunal did not conclude that there was a transfer between TVA and AHK under Regulation 3 (1) (a) of TUPE. Service Provision Change (SPC)

[69]That was however was not the end of matters. Mr Ridgeway submitted that there was a relevant transfer between R1 and R2 by virtue of a service provision change in terms of Regulation 3 (b)(i) ,

(ii) or (iii). He suggested that this in fact may be a stronger argument.

[70]It appeared to the Tribunal that fundamental to determination of this issue under all three limbs of regulation 3 (b) is identification of the client before and after the alleged SPC. This indeed is reflected to a degree in question 3 (b) of the agreed LOS, which asks the ET to ‘identify the client of R1 both before and after the change’.

[71]There was no issue that the client before 29 September was VP.

[72]The issue is who was the client after 29 September 2023. Mr Ridgeway’s submission was that in a pre-pack administration where the key aims to are to keep the business as a going concern TUPE would apply to any sale, bearing in mind a pre-pack is a sale normally arranged before the administration. Furthermore, he submitted and based on the findings in Smallsteps as TVA was providing services to VP, the new contractor, AHK took over the provision of the delivery service and TUPE would apply to any service provision change where a new contractor took over the contract from the insolvent company be that AKH or another i.e Premier.

[73]Mr Ridgeway submitted that Hunter, relied upon by Mr Bradely, was fact specific and could be distinguished on that basis.

[74]In this case, he submitted TVA provided VP with a delivery service integral to their business. VP would not be a viable business without it - the delivery service really is the ‘bee all and end all’ to that business functioning. The administrator was engaged under a prepack arrangement - the aim of which is to keep the business alive and continuing to trade. Mr Aziz is a director of Premier Services and Products Limited, the company which ultimately took on these deliveries. Mr Ridgeway submitted that TVA was deliberated sidelined and Hunter is a different set of facts/different factual matrix to the current case. A material difference is that the affected 59 employees, were organised to provide the services and the 11 claimants were key to the provision of the delivery services. In Hunter, the Insolvent company owned commercial properties and only had one employee; furthermore, there was a genuine change in client at the same time as the change in contractor. This case should be distinguished on the facts from Hunter, especially as the services were still supplied after the administration took effect and continued to be required by VP as it continued to trade normally after the administration. He submitted that arguably the client had not actually changed its identity. There was no gap in the services being provided.

[75]Mr Ridgeway also submitted that Hunter is now 13 years old. In addition he submitted that the decision in Hunter does not affect the ability for either an employee or a respondent to argue that by taking an outsourcing agreement or one ‘in house’ TUPE applies. He submitted that it was notable that this argument was not included and not considered by the Court of Appeal in Hunter.

[76]Mr Ridgeway also submitted that the employees were consciously and deliberately part of the team supplying the client (VP) and not doing the work by ‘chance’ as in Eddie Stobart ;again, the facts in the current case are distinguishable from Eddie Stobart.

[77]Mr Bradley on the other hand submitted that Hunter applies. The fact that was decided in 2013 is of no consequence and it has in any event been followed in SRN Denton and CT Plus Yorkshire.

[78]The Tribunal began by considering the terms of Reg 3 (1) (b). Each of the three types of SPC listed in Reg 3(1) (b) refers to ‘a client’ and then to ‘the client’.

[79]The Tribunal considered the application of Hunter to this. The Court of Appeal in Hunter held that the language of Reg 3 (1) (b) is only consistent with the situation where there is the same client throughout; and that regulation 3 (3), which focuses on the intention of the client, is premised on the same assumption.

[80]The Tribunal had regard in particular to the judgment of Ellias LJ at paragraphs 22 and 23 in which it states that there may be issues where a purposive interpretation is appropriate with respect to service transfer provision provisions, and where the courts should approach matters as they would similar issues relating to a transfer of undertaking under regulation 3(1)(a) giving as an example, it may not be necessary to be too pedantic with respect to the question whether the activities carried on before and after the transfer are sufficiently similar. However, Ellias LJ stated there was no room for a purposive construction with respect to the scope of regulation 3(1)

(b) itself. So far as that is concerned, in his view, there was no conflict between a straightforward construction and a purposive one. The natural construction gives effect to the draftsman’s purpose.

[81]The Tribunal was not persuaded that Hunter could be distinguished on the basis of the facts. All cases and TUPE cases are fact specific. The factors relied upon by Mr Ridgeway in this regard cannot operate so as to displace what is a clear statement of the law. In any event, there was no evidence to support the conclusion that TVA was deliberately sidelined, as suggested. The evidence was that terms which had been less favourable that those offered to VP were offered by TVA to AHK , and that negotiations broke down.

[82]The Tribunal was satisfied that Hunter applied in this case, and was authority for the proposition that the wording of Reg 3 (1) (b) means that for each of the three types of SPC in 3 (1) (b) (i), (ii) and (iii), the activities must continue to be carried out on behalf of the same client for an SPC to occur.

[83]The Tribunal did not accept Mr Ridgway’s submission that Hunter does not affect the ability for either an employee or a respondent to argue that by taking an outsourcing agreement or one ‘in house’ TUPE applies, on the that this argument was not included and not considered by the Court of Appeal in Hunter. While unlike the EAT, the Court of Appeal did not address the question of whether the client must also remain the same for an SPC to occur under Reg 3(1)(b)(i) and (iii). The lack of any material difference in the wording leads to the conclusion that the three definitions of SPC must be interpreted consistently.

[84]With regard to Mr Ridgway’s submission on the effect of Smallsteps, the Tribunal was not satisfied that there was anything in that judgment, which in any event dealt with the protection of employees of the insolvent company, which allowed this Tribunal to conclude that TUPE apples to any service provision change following a prepack sale. This appeared to be the position contended for by Mr Ridgeway. To reach such a conclusion would be to ignore the statutory language of Reg 3 (1) (b).

[85]The Tribunal then considered the identification of the client. Both parties agreed that this was a matter of fact for the Tribunal.

[86]Mr Ridgeway asserted that the client was VP, or; that either TVA became the client as they continued to supply the services; or that there was an ‘insourcing’ or ‘second generation outsourcing’ situation.

[87]Alternatively, he submitted that under the pre-pack system VP was sold as a going concern and was acquired with a view to continuation of the business by TVA analogous to Smallsteps. He asserted there was a transfer of undertaking to AHK. In essence, TVA’s case is that AHK ‘stepped into the shoes’ of VP by virtue of the acquisition from the administrators and became TVA’s client.

[88]The Tribunal was not persuaded that Smallsteps assisted in the manner suggested. It could not be concluded on the basis that there was a prepack sale by the Administrator to AHK and that AHK carried out the same or similar activities to VP, and that VP staff transferred to AHK under TUPE, that AHK became the VP the purposes Regulation 3 (b) (1) . AHK at all times remained a different legal entity to VP notwithstanding these elements.

[89]VP was TVAs client by virtue of the Contract. The Contract did not transfer to AHK and it was not part of TVA case that it did.

[90]The Tribunal was not persuaded that AHK became the client because TVA continued to supply services to them. The only services which were supplied after 29 September were deliveries on 30 September 2023, when TVA was unaware of the situation. TVA was not instructed by AHK to carry out this work. TVA considered they were providing a service to VP on 30 September 2023 as evidenced by the fact they invoiced VP in administration for the work. As soon as AHK advised TVA on the situation, the deliveries stopped and the parties sought to renegotiate terms.

[91]Even if AHK was the client, then as submitted by Mr Bradley there was no evidence to support the assertion that AHK insourced the work (Reg 3 (b) (iii)) that had been carried out by TVA . Alternatively, as Mr Bradley submitted, if this was a second generation outsourcing situation (Reg 3 (b) (1) (ii)) then the transferee would be a subsequent contactor. Lastly there was no evidence to support the conclusion that AHK ceased carrying out the work and instructed a contactor ( reg 3 (b) (i) ).

[92]The effect of these conclusions is that the Tribunal was not satisfied that there was a relevant transfer under Regulation 3 (1) (b).

[93]While this was not an issue for determination at the PH, the consequence of this decision is that AHK should be dismissed from the proceedings. If there is any objection to that, parties should inform the Tribunal in writing within 14 days. SCHEDULE OF CLAIMANTS Case Number Claimant Attended via CVP (Y/N) 4106848/2023 S Hodson N 4100088/2024 C Penman Y 2500088/2024 K Ryder N 3313009/2023 G Smith Y 1406309/2023 M Tasker N 1406313/2023 J Gater N 1406311/2023 N Richards N 1406312/2023 J Williams N 1406310/2023 M Davies N 1400064/2024 S Sutherland Y 3313056/2023 G Lankster Y