Ward Hadaway Solicitors v (1) Mr A Love (2) Mrs S Scott (3) Capsticks SOlicitors LLP UKEAT/0471/09

Transfer of Undertakings - Service Provision Change

When the NMC after competitive tender gave a new contract for future solicitors’ regulatory services to Capsticks, and none of the work in progress was handed over by Ward Hadaway, and no employee transferred, there was no service provision change under new TUPE 2006. Employment Tribunal Judgment upheld.

Court: Employment Appeal Tribunal (UK)

The case of Ward Hadaway Solicitors (“Ward”) v Love & Others has decided that there is no ‘service provision change’ and therefore, no TUPE transfer where contracts for future services are awarded to a new service provider and where no work in progress is transferred.

Generally speaking, a TUPE transfer is triggered by a service provision change in the following circumstances:-

1. There is an ‘organised grouping of employees’ whose ‘principal purpose’ is to carry out the services being transferred; and

2. The services are:- (1) outsourced/contracted-out; (2) Services are assigned to a new service provider on re-tendering; or (3) Services are brought back ‘in-house’. Ward provided legal services to the Nursing and Midwifery Council (“NMC”). The work was re-tendered and Capsticks Solicitors (“Capsticks”) were appointed as the single legal adviser.

Capsticks were to provide legal services which were, to some extent, different than those provided by Ward. No new work was undertaken by Ward after Capsticks’ contract commenced, however, Ward continued working on around 100 ongoing cases for over 6 months until all cases concluded.

The EAT held that there was an ‘organised grouping of employees’ within Ward. However, as Ward continued to carry out work for the NMC after the contract with Capsticks commenced, the services did not cease and there was no service provision change. As a result, there was no TUPE transfer.

This decision suggests that where a company is allowed to complete work in progress for a substantial period then TUPE is unlikely to apply as the services do not cease to be carried out by the original contractor. If, however, Ward had transferred all, or the vast majority of the work to Capsticks, it is likely that the EAT would have held that there was a TUPE transfer.

The information contained in this article is given for general information only and does not constitute legal advice on any specific matter.Click on this link to access the full judgement.External Link