TUPE – short term duration exception is narrowed
In an important judgment for those entering contracts of uncertain duration, the EAT has restricted when short-term duration exceptions to TUPE…
In an important Judgment for those entering into contracts of uncertain duration, the Employment Appeal Tribunal has restricted when the short-term duration exception to TUPE transfers will apply. In Robert Sage Ltd T/A Prestige Nursing Care Ltd v O’Connell the EAT has held that the uncertainty surrounding the future care of an individual, did not stop TUPE applying to transfer the individual’s support workers to a new contractor. This Judgment will reduce the force of any argument that the possibility of an arrangement being short-term stops TUPE applying.
North Somerset Council procured the provision of care to A, who had severe learning difficulties, in her own home. Six support workers had worked with A for years and had previously TUPE transferred to the existing care provider. When that provider gave notice to the Council to end the contract after an incident which raised some concerns about the provision of care being in A’s home, the Council decided to pursue an application to the Court of Protection to transfer A to new accommodation. In the interim, the Council contracted with Prestige to provide the care for A. Prestige said the staff did not transfer because their contract was only for temporary emergency cover pending the outcome of the application to the Court and could cease on 24 hours notice. In practice the Court process became protracted and was ultimately withdrawn. At the date of the Tribunal hearing (nine months later) Prestige were still providing care to A in her own home.
Where “the client” intends that the activities carried out under a contract will be for a task of short-term duration, TUPE does not apply under the service provision change rules. The success of recent appeal cases in avoiding TUPE applying using this provision, has increased awareness of it. Under the wording of the Regulations, the test is about the client’s intention not what actually happens. So in this case what was important was what the Council intended when they engaged Prestige. Did the Council’s “hope and a wish” that the arrangement would only be short-term suffice? In its Judgment the EAT has clearly held that the Council having a hoped for outcome, was insufficient to be the required genuine intention which would stop TUPE applying. Therefore TUPE should have applied to transfer the employees to Prestige.
What does this mean for me?
We have seen a significant increase in recent months in arguments around TUPE and short-term contracts. If you are the incoming contractor such arguments can stop you needing to take transferring staff, potentially with long service and better terms than your own. If the contract may only be a short one, the application of TUPE may mean that the contract is not worthwhile on a cost-benefit analysis as you may be left with a number of staff at contract end. If you are the contracting organisation seeking an interim or short-term solution, the application of TUPE may increase the costs quoted by those offering to provide the service. A stark example of this involves care provision specific to an individual which could be for a short period, where the end of the contract could occur at any time. This case clearly shows that the likelihood of an argument succeeding before a Tribunal that TUPE should not apply in these circumstances is low. Where the length of an arrangement is uncertain that does not stop TUPE applying, whatever the contracting organisation’s hope.
TUPE is complex and whether it applies in practice will always depend upon the circumstances of each particular case. Do take advice on the circumstances you face and, in particular, on arguments which may be presented to you as to why TUPE may not apply. This Judgment reminds us that Tribunals will often interpret TUPE in a way which is consistent with its employment protection objectives – sometimes even where the literal wording of the law might look like it supports other interpretations.