In Seawell Ltd v Ceva Freight (UK) Ltd, the Scottish EAT again considered the meaning of 'an organised grouping of employees' in the context of service provision changes under TUPE, and followed the approach set out in Argyll Coastal Services Ltd v Stirling (above).
Ceva is a freight forwarding and management logistics business.
Its workforce is organised into a group dealing with
'inbound' goods and a group dealing with
'outbound' goods. Mr Moffat was employed in the outbound
group with seven other people. He worked 100% of his time on an
account for Seawell, whilst his group colleagues worked on other
accounts in addition to the Seawell account. Following
Seawell's decision to take the activity in-house, a dispute
arose as to whether Mr Moffat had transferred to Seawell under
TUPE. The tribunal concluded that TUPE applied because Mr Moffat
spent 100% of his time on Seawell work.
However, the EAT held that the tribunal had failed to apply the
law correctly. It should have identified an organised grouping of
employees and then identified the activities carried out by that
grouping. The EAT found that the only deliberately organised
grouping of employees was that of an 'inbound' and an
'outbound' operation. There was no grouping organised for
the purposes of the Seawell contract. Nor was it sufficient that Mr
Moffat spent all his time on Seawell work to show that he was
'an organised grouping'. TUPE also requires the organised
grouping to carry out all the activities under the contract.
Seawell took the whole contract back, not just the work performed
by Mr Moffat.
This case follows the more restrictive approach taken recently by
tribunals interpreting the service provision changes of TUPE. It
highlights the need to organise employees specifically with
reference to client needs and requirements.
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