The only official magazine of The Cleaning Show

TUPE or not TUPE

Published 9th August, 2010 by Neil Nixon

TUPE or not TUPE

A recent tribunal decision has illustrated that the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) applies even where there are building closures and shift changes - as long as the cleaning contract retains its entity. So when tendering for contacts, be aware that the contract/company you are providing the service to is the entity, not the building.

In this particular case, Brayborne provided a daily cleaning service to a college which went out for tender at the same time as moving two of the three buildings into a new campus. All tenderers were made aware of the building moves and that TUPE applied to all staff. The contract was ultimately awarded to a new contractor last summer.

The new contractor accepted no liability for costs to the employees as a result of these closures and took the view that, although TUPE did apply, it only applied to one of the buildings that remained, not the two that were shutting down and relocating to the new campus.

Brayborne had approximately 50 employees who had been consulted throughout the process. They were advised that TUPE clearly applied and they would all automatically transfer. The new contractor agreed TUPE applied and put it in writing, but a week before the transfer date retracted this as, in its opinion, it only applied to the existing building - which equated to only one third of the team employed at the college.

Subsequently, Brayborne and the new contractor became respondents one and two in a tribunal in November, with an agreed bundle of approx 600 pages. The hearing, which lasted a full day, was followed by a request from the judge for final submissions from both respondents. A final judgement was received during February 2010, stating that the Transfer of Undertakings (Protection of Employment) Regulations 2006 applied to the service provision change of the cleaning contract for the college and therefore the new contractor, who took over the contract on 1 August, was liable for redundancy, pay in lieu of notice, and the liability for accrued holiday.

The employment judge concluded: “Applying the law to the facts of this case, the transfer of the cleaning contract for the college from the existing to the new contractor on 31 July came within the definition of a relevant transfer under both Regulation 3(i)(a) and 3(i)(b). I am satisfied that there was a transfer of an ‘economic entity’ which retained its identity after the transfer. The economic entity in question was the cleaning contract at the college. Both before and after 31 July the cleaning contract was for the same employer, servicing the same students and staff and carrying out very similar, if not identical, functions although at a different time of day and on different premises. In addition, the bidding for the contract was on the basis that TUPE applied and the contractor quoted on the basis that that was the case. In fact, all parties clearly considered that TUPE applied until some eight days before the transfer when the new contractor changed its mind. Prior to that it clearly took the view that the contract, which was let as a single activity without distinction between the sites, was clearly intended to apply to all employees.”