Carlisle Facilities Group v Matrix Events & Security Services and others, 16 September 2004, Employment Appeal Tribunal
Over an eight-year period, the employer was a contractor of security services to a company operating cross-channel ferry services. Thirty-two security officers were employed to work specifically on that contract.
Dissatisfied with the security officers’ level of performance, the ferry company terminated its contract with the employer and awarded the work to a second contractor.
The second contractor refused to take on the security officers, and so they brought claims for unfair dismissal and a breach of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE regulations) against their employer, the second contractor and the ferry company.
In accordance with TUPE regulations, staff engaged in a transferred undertaking are automatically transferred to the new employer on their existing terms and conditions (in this case, it would be the second contractor).
However, the tribunal held that there was no transfer of undertaking in this case. In the tribunal’s opinion, the second contractor had not sought to avoid the TUPE regulations by refusing to take on the security officers – the reason for its refusal to employ them was the ferry company’s dissatisfaction with their performance. The employer unsuccessfully appealed.
The Employment Appeal Tribunal (EAT) concluded that where a labour-intensive economic entity was the subject of a claim under TUPE, a tribunal was obliged to consider whether any of the employees had been transferred and, if not, whether the reason was to avoid TUPE.
In this case, the EAT was satisfied that the incoming contractor’s reason for not employing the security officers – the client’s dissatisfaction with their performance – was genuine, and not an attempt to avoid the application of TUPE.