“(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.” and in which the conditions set out in paragraph (3) are satisfied.”
“As to whether there is an undertaking, there needs to be found a stable economic entity whose activity is not limited to performing one specific works contract, an organised grouping of persons and of assets enabling (or facilitating) the exercise of an economic activity which pursues a specific objective - Sanchez Hidalgo paragraph 25; Allen paragraph 24 and Vidal para 6 (which, confusingly, places the reference to “an economic activity” a little differently). …. (ii) In order to be such an undertaking it must be sufficiently structured and autonomous but will not necessarily have significant assets, tangible or intangible - Vidal paragraph 27; Sanchez Hidalgo paragraph 26. (iii) In certain sectors such as cleaning and surveillance the assets are often reduced to their most basic and the activity is essentially based on manpower - Sanchez Hidalgo paragraph 26. (iv) An organised grouping of wage-earners who are specifically and permanently assigned to a common task may in the absence of other factors of production, amount to an economic entity - Vidal paragraph 27; Sanchez Hidalgo paragraph 26. (v) An activity of itself is not an entity; the identity of an entity emerges from other factors such as its workforce, management staff, the way in which its work is organised, its operating methods and, where appropriate, the operational resources available to it - Vidal paragraph 30; Sanchez Hidalgo paragraph 30; Allen paragraph 27.”
“…..the court has repeatedly held that, in certain sectors, the activity is essentially based on manpower. In such circumstances, a structured group of workers may, despite the absence of significant material or immaterial assets, correspond to an economic entity for the purposes of Directive 77/187 : see in particular, concerning cleaning services.”
“…. the introduction in TUPE 2006 of the concept of a transfer of undertakings by service provision change was intended to remove or at least alleviate the uncertainties and difficulties created, in a variety of familiar commercial settings, by the need under TUPE 1981 to establish a transfer of a stable economic identity which retained its identity in the hands of the alleged transferee, particularly in the case of labour-intensive operation, by including within the definition of a transfer of undertaking the situations falling within Regulation 3(1)(b) in which the conditions set out in Regulation 3(3) were satisfied. The three situations falling within Regulation 3(1)(b) can shortly be described as outsourcing (Regulation 3(1)(b)(i)), in-sourcing (Regulation 3(1)(b)(iii)), and change in the provision of activities or services carried out on behalf of a client between one contractor and another (Regulation 3(1)(b)(ii)). All these situations are well-known to employment lawyers to have caused problems under TUPE 1981.”
“ “Service provision change” is a wholly new statutory concept. It is not defined in terms of economic entity or of other concepts which have developed under TUPE 1981 or by community decisions upon the Acquired Rights Directive prior to April 2006 when the new Regulations took effect. The circumstances in which service provision change is established are, in my judgment, comprehensively and clearly set out in Regulation 3(1)(b) itself and Regulation 3(3)……. In contrast to the words used to define transfer in TUPE 1981 the new provisions appear to be straightforward; and their application to an individual case is, in my judgment, essentially one of fact. In this context there is, as I see it, no need for an Employment Tribunal to adopt a purposive construction as suggested by Mr Cooper, as opposed to a straightforward and commonsense application of the relevant statutory words to the individual circumstances before them; but equally and for the same reasons there is no need for a judicially prescribed multi-factorial approach, as advanced by Mr Bourne, such as that which has necessarily arisen in order to enable the Tribunal to adjudge whether there was a stable economic entity which retained its identity after what was said to be a transfer falling within what is now Regulation 3(1)(a). In a case in which Regulation 3(1)(b) is relied upon, the Employment Tribunal should ask itself simply whether, on the facts, one of the three situations set out in Regulation 3(1)(b) existed and whether the conditions set out in Regulation 3(3) are satisfied.”
“No doubt the broad purpose of TUPE is to protect the interests of employees by ensuring that in the specified circumstances they “go with the work” (though the assumption that in every case that will benefit, or be welcome to, the employees transferred is not universally true). But it remains necessary to define the circumstances in which a relevant transfer will occur, and there is no rule that the natural meaning of the language of the Regulations must be stretched in order to achieve transfer in as many situations as possible.”
“… responsibility for the management of the properties carried on in [Mr Hunter’s] hands for the benefit of Aviva and the receivership and [Mr Hunter] used the services of [Mr McCarrick] and his colleagues. It was [Mr Hunter] who continued to provide the service of the management of the properties.”
“The Respondent contends in the Respondent’s Answer that his employment transferred under Regulation 3(1)(a) first to WCP Management Ltd and then to the Appellant. In paragraph 32.1.7 the ET clearly rejected the contention that the changes in February 2009 constituted a transfer of an undertaking within the meaning of Regulation 3(1)(a). They held that they constituted a service provision change within the meaning of Regulation 3(1)(b). There is no appeal by either party from this conclusion of the ET. Although there was no express rejection of the argument that there was a transfer of an undertaking under Regulation 3(1)(a) in August 2009 that is necessarily implied in the finding that there was a service provision change within the meaning of Regulation 3(1)(b) on that occasion.”
“The matters relied upon by the respondent to seek to uphold the decision of the ET on the basis of regulation 3(1)(a) are insufficient to support a conclusion that that constituted the transfer of an undertaking within the meaning of regulation 3(1)(a). The facts relied upon relate solely to the organised group of employees and the activities carried out by them. No complaint is made on behalf of the respondent of an absence of findings as to whether equipment was needed to carry out the work and whether it transferred, as to what work was carried out by the employees before and after the transfers, or the financial arrangements between putative transferor and transferee. It may be that a consideration of these matters would not have assisted the respondent.