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TUPE: Service Provision Change

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 Thanks to Ed McFarlane of Deminos HR for preparing this case summary

When a Council-tendered 'park and ride' service closed after a competitor set up at the site, was there a service provision change?

No, held the EAT in C T Plus (Yorkshire) CIC v Stagecoach, turning down an appeal against an employment tribunal's finding that there was no service provision change ('SPC').

The Appellant bus company contracted with Hull City Council to provide a park-and-ride service, subsidised by the Council. Stagecoach set up on its own in competition, which led to the Council cancelling its contract with the Appellant from the day that the Stagecoach service started. An employment tribunal rejected the contention that there was an SPC and hence a TUPE transfer of staff to Stagecoach when the Appellant ceased operations.  The EAT agreed.

The EAT urged a 'commonsense and pragmatic' approach to the SPC regulations. Here, Stagecoach was carrying out a service as a commercial venture on its own behalf, not on behalf of the Council as a 'client', which is required for an SPC by TUPE regulation 3 (1) (b).

Practitioners may note that the EAT defined the term 'client' in an SPC as 'an organisation that is in a position to carry out activities either itself or by commissioning them from others to carry out those activities on its behalf.