Employment Law Cases

Mach Recruitment Ltd v Oliveira

A tribunal was entitled to find an organised grouping of employees for the purposes of a TUPE service provision change despite limited evidence being presented.

Under the Transfer of Undertakings (Protection of Employment) Regulations 2006, a service provision change (SPC) can only happen where, immediately before the transfer, there is an ‘organised grouping’ of employees whose principal purpose is to provide the service. Only employees who are permanently assigned to the grouping will transfer.

Background

Mrs Oliveira had been employed by a temporary work agency, G-Staff, as part of a team carrying out the same role for a single client (BPC) from 2015. She later went to work for a different agency, Mach, but Mach said that she was a worker and not an employee. Mach went on to take over supplying workers to BPC.

The work dropped off and Mrs Oliveira was terminated with no notice or redundancy pay. She argued that she was an employee and had continuous service from 2015 and that her employment had transferred from G-Staff to Mach under TUPE as this was a SPC.

 Mach disagreed, arguing there was no deliberately created group dedicated to the client and that any such arrangement was simply a coincidence and so no notice pay or redundancy was due. The issue for the tribunal was whether an organised grouping existed – it held that it did. Mach appealed, arguing that there was insufficient evidence of an organised grouping.

EAT decision

The appeal was dismissed.

Reviewing the relevant case law, the EAT emphasised that deciding whether a SPC has occurred should be a straightforward process of reasoning.

While there was a lack of evidence provided by G-Staff about how employees were chosen to carry out the services, this was not fatal. The tribunal had found that there was a ‘settled group’ of employees who carried out the services for its client. Mrs Oliveira always worked alongside the same people (other than when somebody was replaced). The tribunal concluded that this arrangement was the result of a conscious organisational decision and more than mere coincidence.

Determining whether there is an organised grouping is not a black or white assessment and the EAT did comment that this case could have been decided differently. But that did not mean the tribunal’s conclusion was perverse. There was a recognition by the EAT that agency work is typically flexible. Even if the staffing levels fluctuated, this did not mean there was not an organised grouping.

Comment

Tribunals can infer the existence of an organised grouping for TUPE purposes even in flexible or informal working arrangements—especially where agency workers are consistently assigned to the same client and role.

This decision highlights why it is important to retain clear evidence about how staff are organised in relation to contracts or clients. In this instance, the incoming agency had not provided any evidence from which it could be inferred that no organised grouping existed, which was a significant factor in the tribunal’s findings being upheld.

Note that where agency workers are not employees of the agency, they will not be covered by TUPE’s automatic transfer principle, even if they form part of the team delivering the service. Here Mrs Oliveira had a contract of employment with G-Staff.