The recent Employment Appeal Tribunal decision of WGC Services Ltd v Oladele examines an issue which often troubles those dealing with TUPE transfers arising from the outsourcing or re-tendering of services: in what circumstances should managers responsible for a number of services or teams of employees be regarded as in scope to transfer?
Mr Oladele and a colleague were area managers for a cleaning company servicing a number of hotels for Whitbread plc. A number of contracts governed the cleaning services, which were provided across 19 sites. Between June and October 2010 Whitbread terminated those contracts, awarding the services to new contractors. As the services for each hotel were transferred, one by one, Mr Oladele and his colleague, initially responsible for a large number of hotels, found themselves responsible for fewer and fewer. Of the final six hotels, three were transferred on different dates between November and December 2010 to a single new contractor – WGC Services Ltd. Mr Oladele and his colleague asserted they were assigned to a group of employees which provided the cleaning services that transferred to WGC Services Ltd.
The Employment Tribunal initially agreed that the two managers were assigned and upheld their claim. It was accepted that there was an organised grouping of workers dedicated to carrying out activities at the relevant three hotels, and that there was a transfer of the cleaning services from the original contractor to WGC. On the basis that the area managers worked mainly at those hotels where activities were transferred to WGC, the ET Judge concluded that they were assigned to the relevant organised grouping of employees, meaning that they were in scope to transfer.
WGC then appealed, and the Employment Appeal Tribunal has now overturned the original judgment. Its primary reason for upholding the appeal was the ET’s failure to provide sufficient explanation of its reasons for its conclusions. However, the EAT also provided fresh guidance on how the relevant issues should be addressed.
When determining whether or not there is an organised grouping of employees, the EAT held that it is necessary to examine each of the relevant contracts under which services are provided, and to determine by reference to both those and the actual working practices if there is an organised group working across a number of contracts, or separate groups for each contract (or indeed any organised group of employees at all). It expressed the view that a finding that there is a single organised group working across a number of different contracts would need to be carefully explained. The determination of this question is crucial to whether or not managers responsible for more than one contract can be said to be assigned to a particular service or services.
The EAT also confirmed that it is correct to look principally at the activities undertaken by employees immediately before the transfer when deciding whether they are assigned to a relevant group of employees (even in circumstances where those activities may have recently changed because of a series of contract terminations and/or transfers). However, to be assigned means more than merely working for a time on the relevant contract or contracts. The EAT indicates that findings of fact need to be made in relation to the nature of each individual’s work, examining the period of time immediately before the transfer, and having careful regard to the identity of the relevant organised group(s) of employees, taking into account that there might be more than one group.
In reaching its conclusions the EAT applied existing law, but its decision strongly emphasises that no simple assumptions should be made about the assignment of managers (or others) to particular groups of employees. Simply happening to be responsible for a specific group of employees at a particular point in time does not necessarily amount to assignment – clear evidence linking the manner in which the services are provided and the employee’s role will be required.