UK: TUPE - meaning of organised groupings and ETOs

The EAT has confirmed that, where a client transfers its work to a new contractor, there will not be a service provision change under TUPE simply because there are employees who happen to spend most of their time working for that client (for example, because of the interaction between the shift pattern and the organisation of the work).

The requirement for there to be an "organised grouping of employees", the principal purpose of which is to carry out work for a client, means that there must be some form of deliberate planning or intent that the employees work for that client, ie that they be organised by reference to the requirements of the particular client (eg, they are designated as the client team).

Whether there is an organised grouping is a separate and prior question to whether individual employees are assigned to that grouping (when the time individuals spend on the work will be relevant). (Eddie Stobart v Moreman, EAT)

Dismissing employees to replace them with limited company franchises (some of which were set up by the ex-employees) is "an ETO reason entailing changes in the number of the workforce" and therefore not automatically unfair.

Arguments that the "workforce" could include corporate  franchises, so that there was no headcount reduction in workforce, were rejected.  As a result of this decision, replacement of employees in this way may be an attractive option for transferees wishing to reduce staffing costs.

The EAT left open the question of whether a change of an individual's status from employee to independent contractor could also be a "change in the workforce". (Meter U v Hardy, EAT)