When a client asks you to take one of your staff off its account, you will tend to jump to it – the client is always right, even when it’s wrong, and you can hopefully find the displaced employee a berth on another account, no harm done.
However, where the client is asking you to pull a number of team members off its account, there may bigger problems afoot. It could not be a total surprise if shortly afterwards you lost the whole thing.
Which begs the question facing the Employment Appeal Tribunal in Jakowlew –v- (1) Nestor Primecare (t/a Saga) (2) Westminster Homecare last month – where the client directs you to move someone from its account and then immediately gives its work to another provider, is that employee caught by TUPE? Or put in formal TUPE terms, is that employee still assigned immediately before the transfer to the contract being moved?
Nestor supplied the services of Mrs Jakowlew and others to the London Borough of Enfield. She and two colleagues had some form of bust-up in the office which ultimately led Enfield to request that all three be removed from working on its contract. Enfield’s agreement with Nestor allowed it to do that at any time, provided only that the request was not unreasonable or vexatious.
Nestor refused, saying that Enfield’s request was unreasonable and vexatious, and hence not valid. It therefore left Mrs Jakowlew on the account, though in practical terms this was somewhat academic, since she was still suspended following the bust-up.
After the transfer of the contract from Nestor to the successor contractor, Westminster, less than 2 weeks later, Nestor looked again at Enfield’s reasons for canning Mrs Jakowlew and concluded that it did in fact have reasonable grounds for wanting her off the account. That meant that Enfield’s instruction to Nestor was legitimate after all, and consequently that she should have been removed from the contract before the transfer. As a result, it argued that she should be treated as not having been assigned to the contract at the vital moment, and so as staying behind.
This is an unusual argument for a transferor, but Nestor had both lost the Enfield contract and closed its office there, so there was a relatively “clean” redundancy which it could use to dismiss Mrs Jakowlew cheaply. It did so and she sued both Nestor and Westminster. Both Westminster and Mrs Jakowlew thought that her employment had transferred (which you would rather think would be the end of it) but Nestor was adamant that it had not.
The Tribunal took the view that Enfield’s instruction to remove her from the account was effective to achieve that on its demand, meaning that she wasn’t assigned to the contract immediately before the transfer, and so had stayed with Nestor. The Employment Appeal Tribunal disagreed – it was up to the employer to decide who was assigned where, not the client. At the time of the contract transfer Nestor had not put Mrs Jakowlew somewhere else because it was still challenging the validity of Enfield’s instructions to move her. Therefore she was still assigned (even though suspended) and so she transferred. Nestor’s subsequent acceptance of the validity of Enfield’s direction did not alter this – you can’t fiddle with the application of TUPE by things you do or decide afterwards.
Lessons for employers:-
- suspending employees does not by itself affect their assignment for TUPE purposes;
- assignment to a particular service contract is for you to decide, not for the client to dictate;
- but beware a breach of contract claim from the client if you disobey a lawful instruction to take someone off its account and it suffers any loss in consequence, for example through having to indemnify or pay a higher price to the replacement service provider;
- and remember that there are limits on your freedom to assign – quite aside from the position under your commercial contract with the customer, an employee may challenge your decision to assign him to an outgoing contract if your motive is clearly to get shot of him on discriminatory or victimisation grounds.