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Tribunal Wrong in Failing to Take Consideration of Events after Transfer when Determining if TUPE Applied
When determining the “intention” of a party at the time of a service provision change, an employment tribunal should consider all facts available to it when deciding on intention at the time of the change, and that includes events (or lack thereof) in the intervening period between the changes & a hearing.
Considering an appeal in the case of ICTS UK Limited v Mahdi & ors, the Employment Appeal Tribunal, His Honour Judge Shanks sitting alone, judged that in clarifying the interpretation of the judgment in Horizon v Ndeze, when Eady HJ stated that
“the Employment Judge erred in taking into account an irrelevant fact, i.e. what was happening at the time of the Employment Tribunal hearing. That was not the question. The relevant question was: what was the client’s intention at the date of the purported service provision change? Had the Employment Judge maintained focus on that question, the findings of fact suggest that the answer would have been that this security service would be carried out for a limited period of time pending the demolition of the premises.”
that this does not preclude consideration of subsequent events, observing:
“… subsequent events can be relevant in deciding someone’s intention [at the material time – the time of the transfer] and, in my judgment, it would indeed be an error of law entirely to ignore such events and to fail to make findings of fact about them if they were potentially relevant. I do not read Judge Eady QC’s decision in Horizon v Ndeze (EAT 19.5.14) at paragraph 52 to be suggesting otherwise: it is clear from all the facts of that case that the Employment Tribunal may well there have approached the evidence about what was going on at the time of the hearing wrongly; if she was suggesting that it can never be permissible to take into account in an appropriate way such evidence then I would respectfully disagree.”
The appeal from ICTS (which had three grounds that were allowed to proceed to a Full Hearing on a sift – a consideration of the appeal on the basis of the papers alone) was upheld on one issue – that the Employment Judge was wrong to wholly ignore events occurring after the date of transfer when making findings of fact on the intention of the client when the service provision was changed to a new provider.
In this case, an organisation called AUCMS purchased a closed University campus. ICTS were providing security at the site both before, and initially after the purchase of the site (July 2013). In the months that followed, AUCMS advised that they were putting the contract for services out to tender, and ICTS were advised in October 2013 that a new company, First Call Secure Group Limited, would take over the security service from 11 November 2013. The question (still) to be determined in the case was whether this service provision change was a transfer (a service provision change) for the purposes of TUPE – and with that, whether the staff employed at the time of the transfer, Mahdi & ors, who brought claims against both ICTS & First Call, could in practice be able to proceed with a claim against for their dismissal; the facts of who would be liable (if any party) are influenced by whether the transfer of the undertaking fell within the TUPE Regulations.
As the new security contract assigned to First Call was said to be intended for a short-term duration, TUPE (at least in theory, based on the regulations, and the stated intention) would not apply[1], just as long as that was the actual intention immediately before the service provision change. But in determining what the intention was, this judgment clarifies that an Employment Judge can & should look at all available evidence, including events after the date of the transfer, to decide what the intention was, rather than what it was claimed to be.
First Call, although they did not attend the employment tribunal hearing, and subsequently were barred from the EAT proceedings, did provide some written evidence to the employment tribunal, including a letter stating that the intention of AUCMS when they purchased the property was to redevelop this, and thus the contract with First Call was said to be intended to be for a short-term only.
As observed in this judgment though, it was the intention immediately before the transfer (11 November 2013), not at the time of purchase (July 2013) that was important to influence whether TUPE may apply. And in determining what that intention was, rather than what it was said to be, Shanks HHJ observed that:
“In deciding such a question of fact it is almost invariably necessary for an Employment Tribunal (like any other Tribunal) to draw an inference from all the relevant surrounding circumstances presented to it. Such circumstances can obviously include contemporaneous expressions of intent and actions by the relevant party or its agents; but they can also include what the party says or does not say after the relevant event, in particular in response to the forensic process; and in my judgment there is no reason why they cannot also include subsequent events (or non-events), provided of course that those events are capable of casting light on the intention of the relevant party at the relevant date, and that the fact-finder bears in mind that the ultimate issue to be decided is intention and not outcome.”
Or in other words, actions can speak at least as loudly as words, including actions after the event, compared to words said to be of intent before the event – the actual transfer.
TUPE remains one of the shortest pieces of legislation in employment law, yet is often incorrectly described as an extremely complex piece of law. While it’s not quite that, it does continue to throw up developments in how it should be interpreted correctly, making it always worthwhile getting a professional opinion before engaging in a business transaction that may possibly involve TUPE – if staff are associated with the activities before the transfer, even if does appear not to applicable in the circumstances; the costs should be small (very small relative to taking over an undertaking), but the reassurance & savings considerable.