Fragmented activities

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) state that there is a service provision change (SPC) when “activities” that were carried out by one contractor are carried out by a different contractor and remain fundamentally the same. In London Care Ltd v Henry and ors the Employment Appeal Tribunal (EAT) held that, when deciding whether there has been a transfer, judges must clearly identify the “activities”.

Basic facts

Sevacare was the major provider of residential care services for the London Borough of Haringey from 2004 to 2012, when further providers were approved. When Sevacare terminated the contract in June 2016, its work was transferred to four other care providers, including London Care and Carewatch.

All the claimants, who were employed by Sevacare as Homecare Support Assistants (HSAs), argued that, as there had been a TUPE transfer, their contracts had transferred to one of the new providers.

Relevant law

Regulation 3(1)(b) TUPE states that there has been an SPC when “activities” cease to be carried out by one contractor on a client’s behalf and are then carried out by another contractor. Regulation 3(2A) makes clear that the “activities” must remain fundamentally the same.

Regulation 3(3) states that immediately before the SPC, there must be an “organised grouping of employees” whose principal purpose is to carry out the “activities concerned” on behalf of the client.

Tribunal decision

The employment tribunal found that the client was the Council; the “activity” was the provision of adult homecare to individual service users by Sevacare for the Council; and there was an organised grouping of employees whose principal purpose was delivering care to those service users. As the activity remained essentially the same before and after the transfer, there had been an SPC from Sevacare to one or more of the respondents and the contracts of the HSAs had therefore transferred over.

London Care and Carewatch appealed on the basis that the “activity” carried out after the transfer was so fragmented that it was not possible to find there had been an SPC; that there was no “organised grouping of employees”; and no such grouping to which each of the claimants could be said to have been assigned.

EAT decision

Upholding the appeal, the EAT held that it was not clear from the judgment whether the relevant activity was the package of care being provided to a number of service users or the whole service that Servacare provided to the Council. If it was the former, then it remained the same post transfer; if however, it was the whole service, then it did not. Despite finding that the relevant activity was the whole service, the judge decided that the activities remained fundamentally the same pre and post transfer.

This confusion then impacted on the issue of “fragmentation” of the activities, which the judge should have considered when deciding whether the activities carried on by the new contractors were essentially the same pre and post transfer. Instead she considered it when looking at the issue of an “organised grouping”.

As she had decided that the activity was the provision of adult homecare to individual service users, the judge should have considered whether there was fragmentation of activity among the new providers. As none of the contractors took on the majority of the work post-transfer, it was difficult to establish where the Sevacare employees should transfer, not least because various service users were allocated to different contractors. In addition, although the Sevacare work was generally organised on a regional basis, the Council divided it, post-transfer, on the basis of both capacity of the individual organisation and the postcode of the service user.