John McMullen discusses three cases. These are:

* Secretary of State for Business Innovation and Skills v Dobrucki (TUPE and insolvency).

* London Borough of Hillingdon v Gormanley (whether an employee is assigned to the business or service)

* Rynda (UK) Limited v Rhijnsburger (service provision change and whether a single employee can be an organised grouping of employees)

TUPE and service provision: single employee was an organised grouping of employees

The GB Court of Appeal has, in Rynda (UK) Limited v Rhijnsburger [2015] EWCA Civ 75 upheld the EAT decision in that case to the effect that a single employee could constitute an organised grouping of employees for the purposes of a service provision change under TUPE.

For a service provision change under regulation 3(1)(b) of TUPE (and the Northern Ireland SPC Regulations) there must have been, prior to the change, an organised grouping of employees, the principal purpose of which was to carry out the activities concerned on behalf of the client.  In regulation 2(1) of TUPE and the NI SPC Regs it is stated that an organised grouping of employees may comprise a single employee.

In Rhijnsburger the claimant had worked for Rynda from the beginning of 2011.  Prior to that she was employed by Drivers Jonas Deloitte.  For the latter she was first employed under a fixed term contract to manage premises in the Netherlands. Subsequently she took on responsibility both for the Dutch portfolio and also a German portfolio of properties.  Latterly, partly for health reasons, she ceased working on the German property portfolio and managed, solely, the Dutch properties.  She was the only member of staff engaged in managing the office property portfolio in the Netherlands.  Then she transferred employment to Rynda.  She was dismissed in October 2011 having, seemingly, insufficient continuity of service to bring an unfair dismissal claim.  She therefore claimed that the TUPE transfer from Drivers Jonas Deloitte before she took up employment with Rynda.

Lord Justice Jackson, giving the principal judgment in the Court of Appeal stated that the test was as follows:

"If company A takes over from company B the provision of services to a client, it is necessary to consider whether there has been a service provision change within regulation 3 of TUPE.  The first stage of this exercise is to identify the service for which company B was providing to the client.  The next step is to list the activities which the staff of company B performed in order to provide that service.  The third step is to identify the employee or employees of company B who ordinarily carried out those activities.  The fourth step is to consider whether company B organised that employee or those employees into a "grouping" for the principal purpose of carrying out the listed activities."

In the present case Ms Rhijnsburger, the claimant, devoted all of her time to looking after the Dutch properties.  No other employee provided any significant degree of assistance to her in that role.  Therefore she was an organised grouping of employees for the purposes of the TUPE Regulations.

Two prior authorities where the employees had not, on the facts, been organised into a grouping for these purposes were Eddie Stobart Limited v Moreman [2012] IRLR 356 and Seawell Limited v Ceva Freight (UK) Limited [2013] IRLR 726.  These cases could however be distinguished.

In Eddie Stobart, the employees were not organised as to a client but organised as to the shift they worked on.  It was a matter of fortuity that a certain client always placed its orders at such a time that the day shift dealt with them.  But it was not organised or planned.

So to, in Seawell,the claimant, Mr Moffat, was part of a team whose members (with the exception of himself) spent most of their time working for customers other than the client in question.  And even though Mr Moffat spent most if not all of his time working for the client in question he was not part of a team that did so.

The present case was quite different.  The claimant was not part of a team which delivered services to other clients.  No other employee assisted the claimant in managing the Dutch properties.  She was an organised grouping of employees and necessarily assigned to it. 


TUPE: services provided to a number of clients

Whether there is a service provision change TUPE transfer depends on whether activities on behalf of a client cease to be undertaken by one person and are, instead, taken over by a new person on behalf of that client.

It is established law, following the decisions in Hunter v McCarrick [2013] ICR 235 and SNR Denton UK LLP v Kirwan [2012] IRLR 966, that the client referred to in this definition must be the same.  In other words, if the services, after the changeover are carried out for a different client, TUPE and the NI SPC Regs will not apply.

In Ottimo Property Services Limited v (1) Duncan (2) Warwick Estate Properties Limited (UKEAT/0321/14/JOJ) the novel point arose as to whether "a" or "the" client, for the purposes of a service provision change TUPE transfer, was to be understood solely in the singular or whether it also means a grouping of clients in the plural (providing they remain identical).

The facts were that on 1st May 2007 Mr Duncan was employed as a site maintenance manager by Chainbow Limited based at Britannia Village (BV), an estate which comprised different blocks of residential housing, each block being named "BV1", "BV2" and so forth.

There was also a separate resident's management company and a separate general management company which dealt with common parts of the estates.  This company was described in the decision as "BVG".  As at 2007 Chainbow had contracts to provide property management services at BV1-10, BV12 and for BVG.  Each was a separate contract with the separate management company.  BV11 had entered into a property management contract with a different entity.

In the period 2009 to 2011 the resident's management contracts for BVs 4, 8 and 10 moved from Chainbow to another company, leaving Chainbow with contracts to provide property management services for BVs 1, 2, 3, 5, 6, 7, 9 and 12 and BVG.

In February 2012, Trinity Estates acquired the residential property department of Chainbow and subcontracted the onsite property maintenance work to Ottimo.  Mr Duncan's employment was treated as having transferred from Chainbow to Ottimo under TUPE.

In early 2012, the management contracts for BV2 and 9 and for BV12 moved to other companies.  Ottimo was left providing property maintenance services to BVs 1, 2, 5, 6, 7, 10 and BVG. For Mr Duncan, however, things looked the same as before.  He still worked out of an office on the BV estate, which kept him occupied.

In the period May to August 2012 Warwick Estate Properties acquired the property management contracts for BVs 1, 3, 5, 6 and 7.  Warwick employed another property manager.  It declined to take on Mr Duncan as it assumed that TUPE did not apply.  Mr Duncan was therefore dismissed from Ottimo and never physically employed by Warwick.  The question was whether there was a TUPE transfer between Ottimo and Warwick for the purposes of protecting Mr Duncan's acquired rights.

First, it was common ground that reg 3(1)(a) of TUPE (a business transfer) did not apply.  There was no transfer of an economic entity retaining its identity because no assets transferred from Ottimo to Warwick and no employees were voluntarily taken on.

So for there to be a TUPE transfer it had to be a service provision change under TUPE Reg 3(1)(b). The question was whether activities ceased to be carried out by one contractor on a client's behalf and, instead, were carried out by a subsequent contractor on that client's behalf.

The contractors concerned were Chainbow and Warwick.  The client was each of the BVs 1, 3, 5, 6 and BVG, all of which were separate legal entities which had entered into separate contracts. But the employment tribunal held that the service provision change rules could not apply when there was a multiplicity of clients, even if they remained the same after the change of provider.  There had to be a change-over of activity, carried out on behalf of one single client.

It was possible there might have been a service provision change in relation to each individual contract with each BV and BVG but Mr Duncan would not have been assigned to any one particular contract. It was therefore important that the clients were being considered cumulatively.

Before the EAT, the employment tribunal decision was overturned.

In issue was section 6 of the Interpretation Act 1978 which provides that "in any act, unless the contrary intention appears…words in the singular include the plural and ones in the plural include the singular".  So the question was whether TUPE demonstrates an intention that "a client" or "the client" should be understood in the singular and not the plural.

The answer was therefore as follows.  The identity of the client or clients must remain the same before and after the service provision change but this might involve more than one legal entity, subject to the caveat that it would be necessary to discern the intention of the clients for these purposes.

It was a requirement therefore that the clients were sufficiently linked so as to permit the ascertainment of a common intention.  The case was remitted to the employment tribunal for reconsideration of whether there was such a common intent among the clients in this case.  Given the nature of the housing "community" concerned we suggest that intention could well be established.  If so Mr Duncan should have transferred to Warwick, the new service provider, under TUPE. 


When are employees assigned to a service changing hands under TUPE?

The question is to be determined having regard to the way an organisation is structured and the employee's contractual duties within it, said the EAT in London Borough of Hillingdon v Gormanley (UKEAT/0169/14/KN).

Robert Gormanley Limited (RG) was a firm employing three members of the same family.  It carried out painting and decorating work for the housing stock operated by the London Borough of Hillingdon.  Hillingdon then told RG that it was not going to be given any more work and took the service back in house.

A central question was whether the three employees were assigned to an organised grouping of employees, the principal purpose of which was to carry out the activities concerned on behalf of Hillingdon, the client.  The Employment Judge (following the finding of another EJ at a pre-hearing review), held that the employees were assigned to an organised grouping of employees working within RG Limited on behalf of Hillingdon.

However the decision was overturned by the EAT.  Neither Employment Judge had made findings of fact relevant to the assignment issue.

The key authority on the definition of assignment remains the CJEU decision in Botzen v Rotterdamsche Droogdok Maatschappij BV [1985] ICR 519.  This ruling requires consideration of the contractual duties of employees and their role in the organisational framework of the putative transferor.

In the present case, both Employment Judges had failed to consider the organisational framework within which the employment relationships of the employees took effect.  The EAT considered that, as the claimants could be called up on to perform other duties other than for Hillingdon under their contracts of employment (for example one of the employees was company secretary), the ruling that the employees were assigned to the Hillingdon contract had to be set aside.