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Single employee was an “organised grouping” under TUPE service provision change

This Court of Appeal decision explains how a single employee can qualify as an “organised grouping of employees” under TUPE so that a service provision change took place when there was a change of service provider.

Rynda (UK) Ltd v Rhijnsburger | Court of Appeal | February 2015

The facts

Under TUPE, in order for there to be a service provision change (under regulation 3(3)(a)(i)) one of the conditions that must be established is that immediately before the service change there is an “organised grouping of employees” which had as its principal purpose the carrying out of the activities concerned on behalf of the client. The Court of Appeal in this case, in one of the few cases which it has had to look at the TUPE regulations, confirmed that a commercial property manager who worked exclusively on managing a group of Dutch properties for a client was an organised grouping of employees. This therefore resulted in a service provision change when the management of the client’s entire property portfolio was transferred to a new managing agent.

Although the claimant worked alone, she was effectively a one person department providing a dedicated service to the client in relation to its Dutch properties. The key reason why there was an organised grouping of employees was that the allocation of her work for the Dutch client was not left to chance or came about as a result of, in the words of the Court of Appeal’s decision, “happenstance”. Here, however, there had been a deliberate decision by the employer to allocate the client’s properties to the claimant. The employer did not assign anyone to assist the claimant and assigned no other work to her. It was on this basis that the employment tribunal judge was correct to conclude that the claimant was an organised group of employees to which TUPE regulation 3(3)(a)(i) applied.

The Court of Appeal gave examples of when an organised grouping of employees would not exist. Essentially this is when the carrying out work for a particular client results from “a matter of fortuity”. For an organised grouping of employees to take place there needs to have been an element of conscious organisation by the employer of his employees into a grouping – of the nature of the team – which has its principal purpose of carrying out the identified activities for the client. The Court of Appeal emphasised that the employer has got to organise its workforce (of one or more employees) into team with the principal purpose of carrying out the client’s work.

In practice

For the claimant the consequence of establishing a service provision change was that she was able to show that she had the necessary continuous period of employment in order to bring a claim of unfair dismissal, having been dismissed by the new managing agents.

At Quantrills we routinely assist employer clients with a wide range of TUPE related disputes, this Court of Appeal decision will be an important one not to ignore regardless of which side of the argument we need to win! Simon Quantrill or Julie Temple are always happy to receive TUPE related instructions.

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