Case Report: TUPE and service provision changes

A recent employment tribunal decision, involving an employee at a PR agency, is the first time to our knowledge that the courts have looked at the provisions of the 2006 TUPE Regulations on service provision changes. This legislation introduced a new definition for service provision changes, which is much wider than the old definition of a TUPE transfer. As a result, an employee at a PR agency was able to establish a TUPE transfer when one of its clients, a firm of wine merchants, terminated the account and appointed a new agency. This was despite the fact that she was the only employee assigned to that account, and the account was not transferred directly from the old to the new PR agency.

Although this is hardly a typical case, and is likely to be appealed, it does provide an illustration of how far reaching these new TUPE provisions are likely to be. The new definition is wide enough to cover professional services, as well as more traditional areas for contracting like catering and cleaning. There is no requirement for there to be an underlying business which transfers, as long as there is an "organised grouping" of employees (which can be just one employee for these purposes) that has as its "principal purpose" the carrying out of the activity in question.