What is a service provision change under the TUPE Regulations 2006?
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) can apply to a service provision change (ie the transfer of a contract to provide a service), as well as to the transfer of a business.
A service provision change occurs where:
- a service that has previously been carried out by the client is contracted out to a third party;
- a contract to provide a service is awarded to a different contractor following tendering; or
- a service that has previously been carried out by a contractor is brought back in-house by the client.
For a service provision change to be covered by the TUPE Regulations 2006, there must be an organised grouping of employees with the principal purpose of carrying out the activities on behalf of the client. The activities must not consist wholly or mainly of the supply of goods for the client's use.
For example, if a contract to clean the client's premises is retendered and awarded to a different contractor, if there is a team of employees (or one particular employee) dedicated to carrying out the cleaning at those premises, those employees will be transferred automatically to the new contractor.