Ceva Freight UK Limited v Seawell Limited

David Reid
David Reid
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Recently, the Court of Session in Scotland has recently upheld a decision of the Employment Appeal Tribunal (EAT) that a single employee who spent 100% of his time working for one client could not be considered an ‘organised grouping of employees’.

As a consequence, it was determined that there had been no ‘service provision change’ under TUPE from Ceva Freight UK Limited to Seawell Limited.

The case centred around Mr Moffat, who was employed by Ceva as a Logistics Co-ordinator. Ceva’s workforce was divided between ‘inbound’ and ‘outbound’ logistics and they carried on their business at a multi-client site. Seawell was one of their clients and Mr Moffat spent 100% of his time working on the Seawell contract as part of Ceva’s outbound logistics team. Seawell later took the decision to move its logistics back ‘in-house’ and Ceva argued that TUPE applied and therefore Mr Moffat had transferred to Seawell under a ‘service provision change’. Seawell disputed this and subsequently Mr Moffat’s employment was terminated. He claimed unfair dismissal and breach of the TUPE information and consultation obligations against both Ceva and Seawell.

The Employment Tribunal at first instance determined that Mr Moffat had indeed transferred to Seawell by virtue of TUPE but this was overturned by the EAT. The EAT held that the original tribunal had applied the wrong test in deciding that Mr Moffat was an ‘organised grouping’ which had as its principal purpose, the carrying out of activities for Seawell. Although Mr Moffat spent 100% of his time performing the Seawell outbound logistics, it was determined that he was part of a larger Ceva outbound team of eight other employees who had involvement in the Seawell contract. Therefore, the EAT determined that “it is not legitimate to isolate one of that number on the basis that the employee in question devoted all, or virtually all, of his or her working time to assisting in the collaborative effort”. The EAT differentiated this with a situation where a single individual could be classed as an ‘organised grouping’, such as a single cleaner provided by a cleaning company or an in-house solicitor provided by a firm of solicitors. The Court of Session agreed with the EAT’s decision.

Whilst the government has announced that TUPE service provision change provisions are to be repealed as part of its on-going suite of TUPE reforms, there is likely to be a significant transition period before the reforms are fully enacted. Therefore, this decision remains an important one in the lead up to any reforms and employers will be well advised to tread carefully when considering whether an employee can actually be classed as an ‘organised grouping’ in their own right.

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