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TUPE and service provision change

Posted on 27th July 2012
Case law

This is a significant EAT decision of interest to commercial property owners and businesses involved in second generation outsourcing transactions.

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Simon Quantrill Simon
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Taurus Group Ltd v Crofts UKEAT/0024/12

The EAT held that a change in ownership of a building prevented a security guard from arguing that there had been a service provision change under TUPE. This is because under regulation 3(1)(a) of TUPE 2006 the EAT held that for a service provision change to apply it is essential for the services carried out before and after the change to be on behalf of the same client; it is also important that the services provided are generally the same.

The employee in the above case therefore, upon The change of ownership of the building at which he worked prevented him from relying on TUPE to claim unfair dismissal against the new contractors. Liability for his redundancy and notice pay remained with the outgoing service provider. Facilities contractors ought to consider this potential risk and ensure that any relevant consequences are factored into any costing, negotiations and contract terms. In practice, TUPE remains one of the most complex areas of employment law.

In practice

Our TUPE transfer checklist explains when TUPE normally applies and sets out the different obligations of businesses involved in the transaction.

The checklist provides a quick review of the most important issues the parties ought to consider.

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