TUPE: property manager was 'organised grouping of employees', Court of Appeal rules

Out-Law News | 17 Feb 2015 | 10:27 am | 2 min. read

A single employee responsible for the management of a company's property portfolio in the Netherlands was an "organised grouping of employees", covered by UK employment law protections when the service she provided was outsourced to another company.

The Court of Appeal found that Ailien Rhijnsburger's job had transferred to Rynda Real Estate Asset Management Ltd (REM) on 1 January 2011 under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE). This meant that her continuous period of employment for the purposes of an unfair dismissal claim against REM began on 19 May 2009, the court said.

Lord Justice Jackson upheld the reasoning of both the original employment judge and the Employment Appeal Tribunal (EAT) in his judgment. He said that Rhijnsburger had been "specifically instructed" by her employer to manage the Dutch properties, which brought her within the definition of "organised grouping of employees" for the purposes of TUPE. The fact that she had spent a lesser part of her time between October 2009 and early March 2010 also managing certain properties in Germany did not affect the position, he said.

TUPE protects the rights of employees whose companies are taken over by new owners. The regime was clarified in 2006 to govern situations where work is outsourced, brought back in-house or the service provider is changed. Where TUPE applies, the employment contracts of those employees assigned to the group transfer to the new service provider.

In a 2012 case involving logistics company Eddie Stobart, the EAT further clarified what was meant by 'organised grouping' when it found that a group of employees working on behalf of a particular client had to be organised principally to carry out that client's requirements and not merely "organised by happenstance" in order to be protected by TUPE.

Lord Justice Jackson said that the existing law established a four-point test for whether a particular scenario was a 'service provision change' covered by TUPE. Firstly, that service should be identified and all of the activities which the staff of the original provider performed in order to provide that service listed. The employee or employees of the original provider that ordinarily carried out those activities should then be identified. Finally, it should be established whether the original provider organised that employee or those employees into a 'grouping' "for the principal purpose of carrying out the listed activities", he said.

"There remains the question … as to whether it was a matter of happenstance that [Rhijnsburger] was managing [the Dutch properties], or whether this was something which the employer had organised," he said. "The answer is that at each stage of the narrative the employer decided which client [she] should work for."

"This case differs from Eddie Stobart in critical respects. In Eddie Stobart it was a matter of fortuity that [the client] always placed its orders at such a time that the dayshift dealt with them. In the present case there was no similar external circumstance or fortuity which caused [Rhijnsburger] always to be working [on the Dutch properties]. It was a positive decision of the employer which created this situation," he said.