Case of the month: TUPE

TUPE: whether an employee was assigned to an undertaking

 Skillbase Services Limited v King

The Court of Session has decided that time spent working on a particular project is only one factor to consider in determining whether an employee was assigned to a project in a TUPE (Transfer of Undertakings (Protection of Employment) Regulations) transfer.

Skillbase had won a housing maintenance contract from Falkirk Council and supervised the contract through its Grangemouth branch. The housing maintenance contract accounted for 80% of the branch’s workload. Falkirk Council eventually decided to bring the contract in-house and terminate the contract with Skillbase. There was a dispute over whether three employees would transfer.

The tribunal found that Mr Small transferred as he spent all of his time dealing with the local repair teams in relation to the housing maintenance contract. Mr Gray transferred because he substantially did the same job as Small, although he only spent 80% of his time on the maintenance contract. However, Mr King did not transfer, even though he gave evidence that he was spending 80% of his time dealing with the council contract.

The tribunal focused on the fact that as the manager of the Grangemouth branch, King oversaw a number of contracts. He was not directly involved in the operational aspects of the housing contract on a daily basis, he was more of a figurehead. The tribunal decided that the significant proportion of time spent by King on the contract with the council was simply due to an increase in the proportion of branch turnover derived from that contract, and did not mean that he was ‘assigned’ to that contract for the purposes of TUPE.

The Court of Session dismissed the appeal, and upheld the decision of the employment tribunal.

No one factor will be decisive in deciding whether an employee has transferred to an undertaking under the provisions of TUPE.

The amount of time spent working on a contract alone is not decisive when assessing whether an employee is assigned to a transferring business.

What you should do

  • When deciding whether an employee is ‘assigned’ to a transferring business, do not focus solely on the time they spend on that business. Consider other factors, such as the relative importance/value of the work they perform on that business compared with other areas, the terms of their employment contract which show what they can be required to do, and the allocation of the cost of the employee’s time.
  • When purchasing a business or taking over a contract, request a list of transferring employees and request an indemnity from the seller in respect of any individual not on that list who transfers under TUPE.

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