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Philosophy, theology and service provision change

A version of this article has been published in People Management (22 November 2012), the on-line official magazine of the Chartered Institute of Personnel and Development.

As employment lawyers will know, in order to determine whether there is going to be (or has been) a service provision change (SPC) under Regulation 3 of TUPE Regulations 2006 it is necessary to subject the material facts to a number of tests. These should be carried out in a logical order starting with an examination of the relevant activities to decide whether those activities to be carried out after any SPC are fundamentally or essentially the same as those carried out before. Then one must check whether the conditions in Reg 3(3) are satisfied.

One of those conditions is that there must be an organised grouping of employees (which can comprise only one employee) - another is that the activities concerned do not consist wholly or mainly of the supply of goods for the client’s use.

The third is that the client intends the activities will after the SPC be carried out “other than in connection with a single specific event or task of short-term duration” So in order to see whether this exclusion from an SPC is in play, the precise wording of the Regulation must be understood.

Does it exclude (a) all single specific events and all tasks of short-term duration or (b) only those events or tasks that are both “single specific” and “of short term duration”?

This was then the issue addressed by the EAT in Liddell’s Coaches v Cook [2012] UKEATS/0025/12/BI: whether “of short term duration” qualified only “task” or also “a single specific event”. The EAT took the former view and decided that a single specific event was, by definition, of short-term duration, and so it would be tautologous if the words "of short-term duration" were intended to qualify "single specific event" as well as "task".

In the course of doing so Lady Smith who chaired the EAT sitting in Edinburgh concluded that the Government’s DTI guidance, produced at the time when the Regulations first came into force was wrong to suggest that a single specific event could be of long duration. The fact that activities carried out in connection with an event are themselves long-term does not make that event long-term.  She could not envisage anything that could properly be characterised as being an event being other than of short term duration.  The flaw in the DTI thinking appeared to her to be the conflation of “activities” and “event”: 

“An ‘event’ is a single happening or occurrence; in philosophical terms, it is an occurrence involving a qualitative or quantitative change or complex of changes located in a restricted portion of time.” 

More provocatively and certainly with greater reluctance, Lady Smith also took a different approach to that indicated earlier this year by the President of the EAT Mr Justice Langstaff in SNR Denton v  Kirwan [2012] UKEAT/0158/12/ZT [2012] IRLR 966. He decided that case on other grounds so that his view was not necessary in order to determine the particular appeal he was dealing with. However he did go on to describe the same question that arose in Liddell’s as “interesting but somewhat theological.”

No practitioner would claim with confidence that the application of the law relating to SPC in TUPE Regulations to any particular set of facts is straightforward or easy. As more guidance is received from the appellate courts, the first Court of Appeal decision on SPC, McCarrick v Hunter [2012] EWCA Civ 1399 was released on 30 October 2012, it might be hoped that the task would become easier. But if philosophy and theology have now intruded into the SPC arena, that hope begins to look seriously misplaced.