Care providers did not breach TUPE rules when dismissing zero-hours staff, says EAT

26 Feb 2018 By Marianne Calnan

Businesses win appeal as judge finds work was ‘fragmented’ when contracts transferred

Two adult care providers were within their rights to dismiss a group of zero-hours contract workers when they took over the contract for care in a London borough, the Employment Appeal Tribunal (EAT) has ruled.

The workers were not transferred under Transfer of Undertakings (TUPE), as the work they carried out was too ‘fragmented’, according to the EAT, and an earlier tribunal was wrong to decide they had been subject to a service provision change when the contract for care changed providers.

Judge Supperstone wrote, in a judgment published on 21 February, that the London Central Employment Tribunal incorrectly found in July 2017 that there was a service provision change that fell under the TUPE regulations and remitted the case to a fresh tribunal.

A service provision change occurs when certain activities cease to be carried out by a contractor on a client’s behalf, and are instead conducted by a subsequent contractor. The transfer of employment contracts under the TUPE regulations do not apply, however, when there is ‘fragmentation’ of the service activity, or where services are randomly distributed between contractors. 

The claimants were 17 homecare support assistants, employed by Sevacare on zero-hours contracts. In February 2012, the London Borough of Haringey began a framework contract with further providers, alongside Sevacare, to carry out its adult care duties. The contract ended in July 2016.

In a June 2016 letter, Sevacare’s CEO, Ravi Bains, notified the council of Sevacare’s intent to terminate its care services for Haringey, with the final day of service being 15 July 2016. London Care and Carewatch, the respondents in the case, took over the provision of care services to the borough. 

Backed by their trade union, Unison, a 2017 hearing occurred for the workers who claimed there had been a TUPE transfer of their contracts to London Care and Carewatch. The London Central Employment Tribunal found that a TUPE transfer had occurred when Sevacare ended its contract.

London Care and Carewatch appealed on four grounds, including that the relevant activity was so fragmented as to preclude any finding of a service provision change, that the employees were not an organised grouping of employees that has as its principal purpose the carrying out of the activities concerned on behalf of the client, and that each claimant was not assigned to such an organised grouping. 

The two providers also argued that the tribunal’s reasons were defective in various respects, in particular in relation to fragmentation.

While the claimants’ union argued at the appeal that the relevant activity should be defined as the provision of adult homecare to individual service users, or clients, under a ‘whole service’ contract, Sevacare argued that the activity consisted of a provision of a package of care to a number of service users.

Supperstone said the employees were not part of an organised group of employees with a principal purpose of conducting the activities concerned on the council’s behalf. 

He added that they carried out separate care packages and standalone activity that was too fragmented to fall under TUPE. He said there was no evidence of a “deliberate organisation of a grouping of employees to perform council work”.

The judge gave useful guidance to employers that, when considering whether there was an organised grouping of employees, the “question is whether before the change there existed an organised grouping of employees whose principal purpose was carrying out activities for the client”. 

He said the assignment of the contract must be an organised grouping of employees that existed before the change. 

The care providers’ appeal succeeded and the case was remitted to a fresh tribunal.

London Care declined People Management’s request for comment, and Sevacare and Carewatch Care Services did not respond to the request. 

The case followed a Court of Appeal decision last July that found businesses should consult unions before making changes to contracts affecting their members. There, two park police officers were made redundant by the London Borough of Wandsworth, and an employment tribunal decided that, not only could the two men bring unfair dismissal claims, Unison could also bring a claim for the borough’s failure to consult on the redundancies. The EAT, however, decided that none of the three parties had the right to bring a claim.

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