92: Employment Appeal Tribunal considers whether TUPE applied where in-home care service was fragmented and allocated to multiple service providers

In order for TUPE to apply to a service provision change (SPC), the work carried out after reallocation of a contract must be fundamentally the same.

Immediately prior to the SPC, there must also be an organised grouping of employees whose principal purpose is the carrying out of the activities concerned. Previous case law has established that TUPE may not apply in circumstances where services become very fragmented. In London Care Ltd and Carewatch Care Services Ltd v Henry and others, the Employment Appeal Tribunal (EAT) considered whether there had been an SPC under TUPE where the provision of adult care packages for a local authority was fragmented and allocated to multiple providers.

Ms Henry and other claimants were employed by Sevacare (UK) Ltd as support assistants providing in-home care to 168 service users under a contract with Haringey Council. When Sevacare terminated its services in Haringey, the care packages were transferred to several new providers, including London Care and Carewatch, based on their capacity and the postcodes of service users. Carers were allocated according to the rotas which had applied six weeks before the transfer. In some cases all of a carer’s work went to the same provider, but in other cases the work was split between multiple providers.

At a preliminary hearing, the Employment Tribunal found that there had been an SPC under TUPE to the new providers and that there was an organised grouping of employees whose employment should have transferred. Two of the service providers appealed, arguing that the care services had been fragmented to such an extent that there had been no SPC under TUPE.

The EAT allowed the appeal, finding that the Tribunal’s analysis was flawed. The Tribunal had failed to define clearly the nature of the relevant activities carried out by Sevacare pre-transfer and had concluded that those activities were fundamentally the same post-transfer, but before considering the effect of fragmentation. It had failed to consider several important factors. For example, there was no evidence that one contractor took on the majority of the work; and it was difficult to establish where the employment of some of the employees should transfer, given that various service users went to different contractors. In addition, Sevacare’s work was organised on a regional basis whereas it had reallocated work on the basis of both capacity and postcodes. Although the Tribunal had considered the purpose of the organised grouping of employees, it had then failed to make a finding as to whether an organised grouping of employees existed and, if so, whether it had been intentionally formed. The EAT remitted the claim for reconsideration by a differently constituted Tribunal.

This decision illustrates the complexities involved in assessing whether TUPE applies to an SPC where contracts are to be reallocated to multiple service providers. In particular, it is vital to assess whether services are so fragmented that TUPE does not apply.