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Case law: tribunal clarifies scope of exception to TUPE rules on reassigning existing work to new contractor

Businesses taking on work for a client under a contract reassigned to them from another company will welcome guidance from the Employment Appeal Tribunal on when such work relates to 'a single specific event or task of short-term duration' – when the TUPE rules protecting employees do not apply.

Legal Alert

This update was published in Legal Alert - January 2014

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

A company was given a contract to insulate boilers at a power station. Following delays, the contract was given to another business and lasted another eight months. The first company argued that the TUPE rules applied so that its employees should have been transferred to the second business and continued their employment there.

The TUPE rules apply to a 'service provision change' which includes when an existing contract is re-assigned to a replacement contractor. However, there is an exception to the TUPE rules if the contract relates to 'a single specific event or task of short-term duration'.

In this case, the second business claimed the insulation of the boilers fell within this exception but the Employment Tribunal (ET) disagreed. It found the work was too "lengthy and protracted" (it took 18 months in all) so TUPE applied.

The Employment Appeal Tribunal (EAT) found that the employment judge had erred in his considerations, and set out the test for the exception:

  • Did the client intend, at the time of the change, that the relevant work would be carried out 'in connection with a single specific event or task of short-term duration'?
  • Was the work either a single specific event, or a task?
  • Was it of short-term duration?

The EAT found the ET had not considered the client's intention and had also considered whether insulating the boilers was of short-term duration by wrongly considering how long the overall job was. The ET also considered the job to be an 'event', whereas the EAT referred to it as a 'task'. However, this made no difference because the EAT also made clear that it is not only a task that must be of short-term duration for the exception to apply. If the work is a single specific event, that event must be of short-term duration too.

The case was remitted back to the ET for fresh consideration.

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