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The circumstances in which a service provision takes place under the TUPE Regulations 2006 (“TUPE”) include where party A is appointed to undertake activities on behalf of a client which had previously been undertaken by party B on behalf of the client. This captures the classic situation where there is a change of contractor. An employee seeking TUPE protection must establish that they formed part of an organised grouping of employeeswhich had as its principal purpose the carrying out of the activities concerned on behalf of the client.
In Rynda (UK) Ltd v Rhijnsburger, the Court of Appeal faced the question of whether a single employee could satisfy the organised grouping test in circumstances where that employee had been instructed by her employer to carry out all of the activities necessary to provide the services to the client.
The employee was responsible for managing the Dutch properties within an asset fund. She had no other duties and worked full time managing the Dutch properties without any assistance. The Court summarised the approach to be taken in service provision cases as follows:-
- Identify the service that party B was providing to the client
- List the activities performed by the staff of party B in order to provide that service
- Identify the employee or employees who performed those activities
- Consider whether party B organised that employee or those employees into a “grouping” for the principal purpose of carrying out the activities.
The Court held that the employment tribunal and the EAT had applied the correct test in finding that the employee did constitute an organised grouping.
Previous cases were distinguished on the facts. In particular,Eddie Stobart Ltd v Moreman was distinguished on the basis that there was a positive decision on the part of the employer in the Rynda (UK) Ltd case which resulted in the employee working exclusively on the Dutch properties. By way of explanation, the EAT held in Eddie Stobart that employees were not an organised grouping in circumstances where the assignment of employees to the particular activities was as a result of unplanned circumstances, namely shift patterns.
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