In London Care Ltd v Ms J Henry & Others the EAT has highlighted the importance of correctly identifying the relevant activity being carried out before and after a change of service provider in terms of the Transfer of Undertakings (Protection of Employment Regulations (TUPE). The impact of fragmentation (where activities previously carried out by one service provider are distributed among a number of incoming contractors) is fundamental in this assessment.
The Claimant and her colleagues worked as homecare support assistants for Sevacare (UK) Ltd, providing services to people in Haringey. In 2016, Sevacare gave notice to terminate their contract with Haringey and the care packages were transferred to several other providers including London Care. When the packages transferred in some cases all of a carer's work went to the same provider, but in others it was split between them. Where the work was split Sevacare looked at whether any of the new providers got more than 50% of the work and, if so, allocated that carer to that provider.
At a preliminary hearing the ET Judge found that there had been a service provision change from Sevacare to one or more of the new providers. The relevant activities were identified as the homecare services provided to individual users in accordance with their care plans, and the Judge considered that these activities remained the same after the transfer. The contention that the degree of fragmentation meant that there was no service provision change was rejected. London Care, along with one other of the new service providers, appealed.
The EAT allowed the appeal. The ET Judge had not clearly identified whether the relevant activities were the whole services provided by Sevacare or a subset of this. This was an important distinction as if the work transferring to each new contractor was in itself an activity then the activity remained the same post transfer. If, however, the relevant activity was the whole service provided by Sevacare then the fragmentation meant that the activity post transfer was not the same. It was essential that fragmentation was considered at the point of assessing what the relevant activity was, and the ET Judge had not done this so the matter was returned to the ET to be reconsidered by a differently constituted tribunal
While this matter is to be reconsidered, this is not the first time that fragmentation has been identified as preventing a service provision change, such a finding being made in Clearsprings Management Ltd v (1) Ankers & Others and (2) Angel Services UK Ltd and others. These decisions are not simply guidance for ET Judges as to how to deal with cases involving fragmentation. It is important that employers are aware of the impact that fragmentation can have so to correctly identify their liabilities and obligations when contracts change hands.
