- 29 February 2016
The Employment Appeal Tribunal has found that an employment tribunal was wrong in finding that TUPE did not apply where there had been a lay-off of employees as a result of a commercial dispute with the main contractor leading to termination of the contract before the new contractor took on the services (Mustafa v Trek Highways Services Ltd and others UKEAT/0064/15).
In this case, Transport for London (Tfl) contracted with the main contractor to carry out road maintenance services who then subcontracted traffic management services to Trek Highways Services Ltd (Trek). On re-tender, Tfl decided to award the work to a new provider who would take over the services on 1st April 2013. The Claimants were due to transfer to the new provider under TUPE. However, before this date, the main contractor and Trek had a dispute which led to Trek suspending operations on 8th March 2013 and asking staff to go home and wait to be contacted. On 20thMarch 2013, the commercial contract came to an end by agreement and shortly afterwards Trek went into administration.
The main contractor continued to be obliged to provide traffic management services and continued to do so by alternative, ad hoc means pending the services being taken on.
Chambers and Partners
The Clarkslegal team are commercial and good to work with. They get what our business needs and tell me what I need to hear.
The employment tribunal found that there had been no business transfer or service provision change under TUPE given the commercial sub contract had been terminated before the new contract was due to commence. The EAT, however, disagreed stating that the suspension of work did not mean that the entity had ceased to exist. There were still staff, vehicles, and equipment dedicated to the work and the sub-contract remained in existence. Further, in relation to a service provision change under TUPE, it held that the wording of TUPE did not require the organised grouping of employees to be actively engaging in the activity immediately before the transfer and there was nothing in TUPE to suggest that a temporary cessation of activities would preclude there from being an organised grouping.
The case has been remitted to the employment tribunal to reconsider the application of TUPE. It confirms that simply because an outgoing contractor may not actually be performing the services in question at the time of the putative transfer, this does not, in itself, prevent there being a TUPE transfer. In particular, the EAT made clear that the reasons why the activities cease to be carried out (in this case, a commercial dispute) will usually be irrelevant to the application of TUPE.
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.
About this article
SubjectTemporary cessation of work and lay off of employees did not preclude TUPE from applying
Published29 February 2016
Read, listen and watch our latest insights
- 06 February 2023
Redundancy and settlement agreements – What you need to know
In this podcast Ciara Duggan and Sana Nahas members of the employment team at Clarkslegal will guide you through the tricky topic of redundancy and settlement agreements, covering what redundancy means for both employers and employees, as well as how settlement agreements work in practise.
- 01 February 2023
What to expect in construction in 2023
Recent years have brought a host of challenges for the construction industry but what we expect for 2023?
- 30 January 2023
Deborah Scales comments on ‘the proposed Mental Health First Aid Bill’
In People Management, Deborah Scales, Associate at Clarkslegal, discusses the reasons why people professionals would likely welcome a change in set law as a “relatively swift and cost-effective” way to help the workplace.
- 26 January 2023
- Privacy and Data Protection
UK Data Protection: Development round-up 2022 and 2023 trends
In this podcast Oscar Poku and Ciara Duggan members of the Data Protection team at Clarkslegal will be discussing the main developments in the UK Data Protection scene from 2022 and what trends to look out for in 2023.
- 25 January 2023
Government’s response to menopause recommendations in the workplace
The UK Government has recently rejected calls for the menopause to be made a ‘protected characteristic’ and for a large-scale pilot of menopause leave.
- 24 January 2023
Can I still apply to the EU Settlement Scheme after my divorce?
A family member of a ‘qualifying’ EEA national (including the EU, Switzerland, Norway, Iceland, and Liechtenstein) must apply for an EU Settlement Scheme (EUSS) Family Permit to join their EEA family member in the UK. The EUSS Family Permit is valid for 6 months, and once in the UK, the family member must apply for status under the EU Settlement Scheme.