TUPE Challenge in Service Transfer

Client: Health sector

With the planned closure of our client’s business, the service it provided would transfer to a new service provider.  Up until the point when the new provider was confirmed, it was envisaged that the staff providing the service would transfer under TUPE regulations.

However, there was a TUPE challenge from the new provider who claimed that TUPE did not apply on two grounds.  Firstly, that there was not an organised grouping of staff and, secondly, that upon the transfer of the service to the new provider, the ‘client’ would also change.

The solution:

• To clarify the legal position with regard to whether TUPE applied or not
• Advise on possible outcomes for either TUPE transfer or redundancy
• In the meantime, to advise on what actions to take in order to prevent and/or mitigate any legal claims from staff in the future as a result of the TUPE challenge

What we did:
Firstly, we advised on how to show that the staff formed an organised grouping for the purposes of TUPE with their primary responsibilities being to the transferring service.  However, the question as to whether the change in client met the definition of a ‘change in client’ under TUPE regulations was less straightforward.

The current and new clients had worked in partnership to finance and manage the service to date and had planned and agreed the strategy to transfer the service to a new provider.  So were they separate ‘clients’?  While the outcome may seem ‘unfair’ it was established that they were.  Therefore, TUPE did not apply.

Throughout this period Dianne Lambdin, our lead HR Consultant, provided ongoing support and advice to our client’s management and Directors.  We advised on their legal obligations under TUPE regulations; and on the implications if staff did not transfer, including redundancy pay calculations, maternity provisions and staff consultation.  We produced bespoke letters and documents for the various stages of the TUPE and redundancy process.

The Outcome:
The fact that TUPE did not apply was an unfortunate turn of events and all staff were subsequently made redundant in accordance with statutory requirements.  The legal and practical HR advice the Directors and management received throughout the process meant they could rest assured that they had met their legal obligations as employers in the knowledge that they had done all that was possible to secure the future employment for staff.

At the time of the business closure, all redundant staff had secured alternative employment through the support and help of our client’s management.