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One year contract exempt from TUPE 2006

In Liddell's Coaches v Cook and ors the EAT held that a one year transport contract awarded to a different contractor did not qualify as a service provision change under TUPE 2006 as the activities were short-term.

Regulation 3(3)(a)(ii) of the TUPE Regulations 2006 provides that no service provision change (SPC) will occur if the client's intention is that the activities being contracted for will be carried out 'in connection with a single specific event or task of short-term duration'. In this case, contracts with a local authority to transport school children were normally awarded for three to four years, but only one-year contracts were operated because children were temporarily transferred to other schools while their school was being rebuilt. When Liddell’s lost the contract to Abbey, they dismissed Cook, arguing that his employment had transferred to Abbey, but they denied liability. The EAT agreed with the employment tribunal that the one-year contract between East Ayrshire Council and the coach operator to transport the schoolchildren was properly characterised as a task of short-term duration given that such contracts were usually awarded for three or four years, or longer. Therefore the contract did not attract protection under TUPE 2006 as it was excluded from the SPC provisions under Reg 3(3)(a)(ii).

Comment: This is the first full analysis of the 'single specific event or task of short-term duration' exemption from the SPC provisions under TUPE 2006 and the latest in a line of judgments, which have added to the understanding of the contracting out provisions. The Government's response to the call for evidence on the effectiveness of TUPE indicated that it will consult on whether the SPC provisions should be retained or repealed, but from a legal perspective, most would agree that they have brought more certainty in contracting out situations.

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