Davies and Baig v Eton Air Limited, EAT, 22 July 2004

Contract loss is not a TUPE issue: Davies and Baig worked for The Travel Company and dealt with the travel arrangements of a particular customer. Colleagues elsewhere in the business manned a 24-hour emergency service for that customer. The office used by Davies and Baig belonged to the customer, but equipment was supplied by their employer, The Travel Company.

When The Travel Company’s contract with the customer came to an end both employees believed their employment should transfer, under TUPE – the Transfer of Undertakings (Protection of Employment) Regulations 1981 – to Eton Air Ltd, which had been appointed by the customer. The tribunal, however, rejected their contentions.

Noting that no property or equipment was involved, the tribunal concluded that the employees merely performed part of a service to a customer. As a result, there was no ‘economic entity’ (ie, business) capable of being transferred under TUPE regulations. The employees appealed.

Rejecting the appeal, the EAT agreed with the tribunal that this case involved the simple loss of a contract for services to a competitor.

There was no transfer of an economic entity. While similar in some respects, there were important differences in some of the services Eton Air offered to the customer.

In addition, Davies and Baig were not exclusively involved in the provision of services to the customer. They were, therefore, engaged to perform only part of a specific contract and were not protected by TUPE regulations.

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