The EAT has held in Amaryllis Ltd -v- Mr McLeod and others 2016 that when determining whether there has been a service provision change, the principal purpose of any organised grouping of workers is to be assessed at the point immediately before the change of provider, and not historically.
Millbrook Furnishings Ltd had carried out work for the Ministry of Defence (MoD) for a number of years. Originally the contract was between Millbrook and the MoD; there followed a period where the contract was awarded to Amaryllis Ltd and Millbrook was a sub-contractor of Amaryllis. Millbrook regained the contract but was unsuccessful when the contract came up for re-tender in 2014, and it was awarded to Amaryllis once more. The question was whether this constituted a service provision change under regulation 3(3)(a)(i) of the Transfer of Undertakings (Protection of Employment) Regulations 2006.
At first instance, it was held that there had been a service provision change. However, it was overturned by the EAT who held that the key question is whether there is an organised grouping of employees whose principal purpose is the carrying out of the relevant activities on behalf of the relevant client, immediately before the transfer. The historical context, i.e. the purpose for which the department had been set up fifty years earlier, could not be relied upon – not least of all because there had been a break of several years when Millbrook was a subcontractor of Amaryllis (and the client was therefore Amaryllis, not the MoD). Although there was evidence that Millbrook’s employees were spending about 68% of their time on the MoD contract, this was because it was their biggest client, rather than because there had been a conscious decision to group them in this way.