In Swanbridge Hire & Sales v Butler (UKEAT/0056/13), the Respondents (Butler and colleagues) were employed by a contractor, Kitsons, on a project to insulate five boilers at a power plant. The plant owner, Kitsons' client, terminated Kitsons' contract partly because of delays in the project, and hired a new contractor, Swanbridge (the Appellant), to complete the project. At the time Swanbridge was hired, two of the five boilers still required cladding.
Was this a service provision change ("SPC") under TUPE?
If it was, the Respondents would have claims against both Kitsons and Swanbridge for failure to inform and consult under TUPE; those who had not been kept on to complete the project would have had automatic unfair dismissal claims against Swanbridge.
The EAT decided that the Tribunal had been wrong to hold that there had been a service provision change under TUPE in this case.
The EAT reaffirmed that TUPE does not apply where the activities the client requires a new contractor to take over are in connection with a "single specific event or task of short-term duration". It is necessary to look at the client's intention at the time of hiring the new contractor, and the anticipated duration of the event or task as from that time (rather than the total duration of the project as a whole) when deciding whether this is the case.
Here, the Tribunal had failed to consider the client's intentions as at the date of the alleged service provision change and as a result, its decision could not stand.
Points to note:
- This decision may assist service providers in arguing that they can take over unfinished jobs without assuming liability for an outgoing contractor's employees under TUPE.
- It is also helpful to note that the EAT considered that the project in this case was not an "economic entity" so the change of contractor could not be classified as a "classic" transfer of an undertaking for TUPE purposes.