Lounging off employees before something provision change doesn’t always prevent them from transferring towards the new employer under TUPE. Lindsay Macdonald reports on the recent situation in the Employment Appeal Tribunal (EAT).
Inex Home Enhancements Limited v Hodgkins yet others
Service provision change
Worker on indefinite sick leave not transferred
3rd party cannot dictate whether an worker is “assigned”
Task: Cope with the problem in which the transferee disputes that TUPE applies
The Change in Projects (Protection of Employment) Rules 2006 (TUPE) cover both traditional business transfers and repair provision changes.
Among the conditions that must definitely be satisfied to allow something provision change may be the existence, immediately prior to the transfer, of the organised grouping of employees whose principal purpose is to handle the appropriate activities.
Contractor Thomas Vale engaged Inex Home Enhancements Limited like a sub-contractor to operate on the particular contract. The job was launched by Thomas Vale to Inex in tranches, each by having an individual works number.
Inex’s employees were employed around the the Construction Industry Joint Council Working Rule Agreement. The agreement so long as, where work temporarily stopped or wasn’t supplied by the business, the workers might be temporarily let go.
During these conditions, the workers would receive remuneration for any limited time period and could be needed to join up as readily available for work on their local Job Center.
During November and December 2012, Inex completed the whole shebang susceptible to Works Order No.8 and also the contractor hadn’t released an additional tranche of labor. It had been expected the next tranche of labor under Works Order No.9 could be issued in The month of january 2013.
This resulted in there is, for the time being, no work readily available for Inex’s employees. The workers were temporarily let go underneath the relation to their employment contracts.
In The month of january 2013, the contractor engaged a brand new company to handle the job and also the sub-contractor contended this amounted to some service provision change under reg.3(1)(b) of TUPE since the employees were an organised grouping whose principal purpose was transporting out work with the contractor.
Employment tribunal decision
The use tribunal discovered that, notwithstanding the very fact there was something provision change, the workers couldn’t be classed being an “organised grouping of employees” as their activities had stopped just before The month of january.
The sub-contractor stated that lounging off employees consistent with their contracts of employment didn’t prevent the whole process of TUPE which the employees’ employment might have transferred under TUPE towards the new sub-contractor.
On appeal, the EAT determined that TUPE doesn’t need the organised grouping of employees to become engaged using the relevant activities immediately prior to the transfer.
In visiting its decision, the EAT required into consideration the cessation of labor was temporary which was evidenced by correspondence from Inex towards the employees.
The EAT also considered the objective of TUPE, particularly protecting continuity of employment, and stated that there’d be prevalent ramifications if whenever a number of employees were let go, it lost its cohesion being an organised grouping.
The EAT stressed that each situation is going to be dependent by itself details. However, the EAT recommended the purpose, nature and entire cessation of labor is going to be relevant in figuring out whether an organised grouping continues around.
Implications for employers
Employers who execute their activities through sub-contractors must be aware that the change of sub-contractor won’t always create a change from the number of those who ultimately carry out the work, even when there’s been a cessation from the work ordinarily presented to them.
Where a company engages a brand new sub-contractor, the use contracts of individuals utilized by the prior sub-contractor may transfer by operation of TUPE.