TUPE will only apply to a change in service provider if, immediately before the change, there is an organised grouping of employees whose principal purpose is carrying out the relevant activities on behalf of the client. There is no definition of “organised grouping”. However, case law has established that the employees should be deliberately organised by reference to the client’s requirements and work together as a team. This can be difficult to assess in practice, as illustrated by the recent case of Mach Recruitment Ltd v Oliveira, where the Employment Appeal Tribunal (EAT) had to consider whether there was an organised grouping of employees in the context of a service provision change between temporary work agencies.
Case Study: Mach Recruitment Ltd v Oliveira
Mrs Oliveira was employed by G-Staff Ltd and supplied to work for one of its clients, Butcher’s Pet Care Ltd (“Butcher’s”). She was subsequently employed by a different temporary work agency, Mach Recruitment Ltd, which then began supplying staff, including Mrs Oliveira, to provide the same services to Butcher’s. Mrs Oliveira claimed that her contract of employment had transferred under TUPE from G-Staff to Mach Recruitment.
The Employment Tribunal held that there was an organised grouping of G-Staff employees whose principal purpose was providing services to Butcher’s, and that TUPE applied when Mach Recruitment took over those services.
Mach Recruitment appealed to the EAT, arguing that TUPE did not apply because the G-Staff employees were not deliberately organised by reference to the Butcher’s work. However, the EAT upheld the Tribunal’s decision. At both agencies, Mrs Oliveira had worked consistently with the same people, specifically on the Butchers’ contract, except when someone had left and been replaced, as is the intrinsic nature of agency work. The Tribunal had been entitled to find that this must have involved a conscious decision about how employees were to be organised, rather than being a coincidence or just a combination of circumstances, such as shift patterns and other working practices. It is important to note that Mach Recruitment produced only scant evidence in support of its argument that there was no organised grouping.
Implications of the EAT Decision
The EAT’s decision illustrates that TUPE may apply to a service provision change where a group of employees is working mainly on tasks for a particular client but may not have been organised with formal planning or deliberate intent. This is consistent with some previous case law which established that employees only need to be organised “in some sense” by reference to the client’s requirements, but simplifies the position compared to other cases which demanded the need for the deliberate creation of a grouping from the outset of a contract. In this case, it was enough for Mrs Oliveira to have consistently worked with the same group of employees. However, a random allocation of employees to a client is unlikely to amount to an organised grouping. The lack of evidence provided to support the employer’s case highlights the importance of maintaining clear records to demonstrate that there is or is not an organised grouping.
