In the case of Taurus Group Ltd v Crofts and another the employee claimed he had transferred from one security company to another under the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") in circumstances in which the customer to whom the security company was providing services also changed.
Mr Crofts was employed by a security company (Reliance) which provided services to a facilities management company called Ely in respect of a student accommodation building managed by Ely. Ely went into administration and the facilities management of the building was taken over by another company, which continued to pay Reliance for the security services.
The student accommodation building was then bought by Mansion Group and Reliance lost the security services contract with effect from completion of the sale. Mansion Group appointed Taurus Group to provide security services for the building. The employee claimed he had transferred under TUPE from Reliance to Taurus Group.
The Employment Appeal Tribunal held that, as there had been a change of client for whom the services were being carried out (namely the owner of the building), TUPE did not apply. This is because the "service provision change" limb of TUPE requires the services to be carried out on behalf of the same client both before and after the transfer. The change of ownership of the building, combined with the change of contractor meant there was no transfer of the security guard's employment to the new contractor under TUPE.
Comment: This is yet another case which appears to narrow the circumstances in which TUPE will apply in an outsourcing scenario and provides further uncertainty for service providers. The government introduced the concept of a "service provision change" (which goes above and beyond what is required under the EU Acquired Rights Directive) in 2006 with the intention of providing greater certainty that TUPE would apply to outsourcings. That certainty is rapidly being eroded by recent case law developments. We have written a separate article about the previous case law developments in this area – please contact a member of the team if you would like to see this.
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