Court of Session provides guidance on TUPE service provision changes

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In DLA Piper's case of the week, the Court of Session has provided guidance on what constitutes an "organised grouping of employees" on a service provision change for TUPE purposes. Ceva Freight (UK) Ltd v Seawell Ltd

Facts

Mr Moffat was employed by Ceva Freight (UK) Ltd, a freight-forwarding and management-logistics company. Its workforce was organised into two groups, one dealing with "inbound" goods and one dealing with "outbound" goods. Mr Moffat, a logistics coordinator, together with seven other employees, worked on the outbound division. Of those working on the outbound side, five employees, including Moffat, worked on the Seawell Ltd contract. While Moffat spent 100% of his time working on the Seawell contract, other members of the outbound team spent much less time working on the Seawell account, varying from just 10% to 30% of their time. In late 2009, Seawell decided to bring back in-house the work that had been carried out on its behalf by Ceva. Ceva asserted that Moffat had transferred to Seawell by operation of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). This was disputed by Seawell. Moffat claimed unfair dismissal against both Ceva and Seawell. There was no dispute as to whether or not the activities had transferred. Therefore, the key issue for the tribunal was to ascertain whether or not Moffat had transferred pursuant to reg.3(3) of TUPE. Was there an organised grouping of employees that had as its principle purpose the carrying out of the activities concerned on behalf of Seawell? At first instance, the employment tribunal concluded that, as the definition of an "organised grouping of employees" in TUPE includes a single employee and Moffat's role had the principle purpose of carrying out the relevant activities, he had transferred pursuant to TUPE. Seawell was therefore liable for unfair dismissal. Seawell appealed to the Employment Appeal Tribunal (EAT). The EAT overturned the tribunal's decision as it found that the tribunal had applied the wrong test when deciding whether or not there had been an organised grouping of employees. It decided that, although TUPE specifies that a single employee can be an organised grouping, this does not mean that an employee who spends 100% of his or her time on work for a particular client automatically constitutes an organised grouping. It concluded that, as arrangements were not deliberately made for Moffat to work on the Seawel