Eddie Stobart Ltd v Moreman and others UKEAT 0223/11
In this case, the EAT held that employees who spent the majority of their time working for a particular client were not an organised grouping for the purposes of the TUPE Regulations.
At the time when its Nottinghamshire depot closed, Eddie Stobart Ltd was providing logistics services to two clients. Eddie Stobart's employees at the depot worked under a shift pattern arrangement whereby the day-shift employees worked mainly on the contract for one client, Vion, and the night-shift employees worked mainly for the other client.
The Vion contract was awarded to a third party when the depot closed. Eddie Stobart informed its day-shift employees, and other employees who spent 50% or more of their time on the Vion contract, that TUPE applied and their employment had transferred to the new service provider. The new service provider did not accept that TUPE applied and so Eddie Stobart dismissed the affected employees. The employees brought Tribunal claims against Eddie Stobart and the new service provider.
A Tribunal found that TUPE did not apply in the above scenario, as the employees were not in an organised grouping within the meaning of TUPE immediately prior to the alleged transfer. Eddie Stobart appealed against the finding.
In dismissing Eddie Stobart's appeal, the EAT held:
- in order for them to be an organised grouping under TUPE, the Regulations require the carrying out of activities for a particular client to be the principal purpose of a grouping of employees;
- this means that the employees must be organised to some extent by reference to the requirements of the client for whom they perform services, not simply providing services to that client for reasons that are unrelated to it (such as shift patterns which are not client specific but which happen to result in certain employees working predominantly for a particular client due to the client's business hours);
- the employees in this case were ultimately organised by shift pattern; the day-shift employees did mainly Vion work, but that was not enough to make them an organised grouping for the purposes of TUPE.
Implications
If a group of employees that works mostly for a particular client is not of itself an organised grouping, what other elements are required? The EAT was not specific, but suggested that both the way employees are "labelled" by the employer, and the way that they perceived their own organisation, will be relevant.
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