TUPE - Whether or not an employee is part of an 'organised grouping of employees'

16 October 2014

In Costain Ltd v Armitage, the EAT considered the case of an employee Project Manager who had managed telecommunications projects under two contracts for the same client. Only one contract provided guaranteed work. When the contract came up for tender it was lost to Costain. Costain accepted that this was a ‘service provision change’ under the TUPE regulations. However, the company argued that the Claimant employee was not ‘assigned’ to the relevant ‘organised grouping of employees’ who performed the services under that contract.

The Employment Tribunal found that the Claimant's employment had transferred to Costain, on the basis that "immediately before the transfer" 67% of his time was spent on the transferring activity.

The EAT however allowed Costain’s appeal. The amount of time the Claimant spent on the project immediately before the TUPE transfer was not conclusive as to whether he was ‘assigned’ to it or not. The need for ‘conscious organisation’ applied just as much to the assignment question as to the identification of an organised grouping of employees in the first place. There had been no evidence of any deliberate plan to have the Claimant work on that particular project. It was not to be assumed that every employee carrying out work for the relevant client would be ‘assigned’ to the ‘organised grouping of employees’ if the employer lost that client’s business. The matter was remitted to a fresh Employment Tribunal to reconsider the issue.

Point to note –

The EAT said that for there to be an ‘organised grouping of employees’ there must be a deliberate putting together of a group of employees for the purpose of the relevant client work. The fact that an employee in that group was only spending a minority of his time on that work immediately before a TUPE transfer would not preclude him being treated as ‘assigned’ to the group. In every case, a close examination of all the facts was required.  

This article is part of the UK Employment Law Update for October 2014