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New TUPE Decision

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Adam Creme, head of the Employment Rights Unit at UNISON, has sent me the transcript of an important TUPE decision, handed down by the EAT on 28th June 2000.

In RCO Support Services v UNISON (+ others), the Aintree Hospitals NHS Trust decided to transfer much of the work from one hospital to a nearby hospital, three miles away. The issue was whether there was a transfer of undertakings in relation to the cleaning and catering support services (which were undertaken by different companies, one at each of the two hospitals) - and, therefore, if the cleaning and catering staff had their employment transferred from one company to the other.

On the facts, the ET held (and Lindsay J. in the EAT upheld) that there had been a transfer.

The case is important because:

(a) unlike most TUPE decisions, it is very readable!

(b) it analyses the conflicting decisions in Suzen, Betts v Brintel and ECM Vehicles v Cox;

(c) in doing so, it sounds the death-knell to the ECJ's decision in Suzen.

Essentially, the EAT confirms that there is no rule of law that - where a labour-intensive business does not take on staff employed by a previous undertaking - there is no transfer of undertaking.

Lindsay J.'s concluding paragraph is reproduced below:

"16. ...In the light of ECM in the Court of Appeal we cannot say with any confidence that the [employment] tribunal thereby erred in law. We are no sorry so to conclude. There is a real danger, were Suzen to be given the unqualified force that has been argued for it, that in labour-intensive areas of employment such as cleaning and catering, where contracting-out is now common and where significant assets are often either unnecessary or unlikely to be moved, an incoming contractor would be able to avoid the [Acquired Rights] Directive by the simple expedient, often easy of achievement, of ensuring that he took on none of the previous contractor's workforce. The protection of employees' acquired rights, a basic objective of the Directive, would not only be jeopardised but, as Miss Gower, for the former employees, asserts, would be jeopardised in relation to perhaps the most vulnerable of all classes of workers, those with only relatively simple and commonly-available skills which, on that account, the incoming contractor could readily choose to supply by way of others in the labour market. There are, of course, economic arguments that incoming contractors should be free to bid for their contracts as competitively as they may dare and should thus be entirely free to avoid all obligations to the entrenched employees. However, such economic arguments are not for us and, had they been intended to hold sway, the Acquired Rights Directive would surely never have been called into existence. We dismiss the appeals."