Charities in transfer of undertakings test
Posted: 4th November 2016
Four charity workers whose roles were shifted from one employer to another during a consolidation exercise will suffer no ill effects in terms of their pay and conditions after convincing a tribunal that the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) applied to their cases.
The four were employed by charity A, which provided accommodation to homeless people under a contract with a local authority. With a view to achieving economies of scale in its provision for the homeless, the council carried out a competitive contract tendering exercise that was won by charity B.
In those circumstances an issue arose as to whether charity B was obliged, by operation of TUPE, to employ the four on the same contractual terms as before. An employment judge (EJ) found that it was, but charity B challenged the decision before the Employment Appeal Tribunal (EAT).
There were certain differences in the ways that the two charities operated. Amongst other things, charity B provided accommodation in large hostels, whereas charity A had dispersed homeless people around a number of houses. The latter had provided its services to those who were over 18, whereas the former imposed an age limit of 25. Charity B also applied a lower maximum period during which services would be provided to individuals.
In dismissing the appeal, however, the EAT noted that there was no dispute that the four, who worked as a team, constituted an organised grouping within the meaning of TUPE. The EJ had followed the correct legal test in finding that the roles that they performed before and after the transfer were fundamentally the same.