Under regulation 3(3)(a)(i) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), for TUPE to apply to a service provision change, there must be an organised grouping of staff existing prior to the change whose principal purpose is to carry out activities on behalf of the employer’s client, where those activities are now going to be carried out by another provider. The question arises: must the organised grouping be a technical assessment for TUPE to apply?
For there to be an “organised grouping,” case law suggests a need for a conscious, deliberate decision by the current employer (the transferor) to place their employees in a particular working arrangement with their client. The decision of the Employment Appeal Tribunal (EAT) in the case of Mach Recruitment Ltd v Oliveira [2025] provides further guidance. In this case, Mrs Oliveira (O) was employed under a contract of employment via the Swedish derogation with G-Staff Ltd, a temporary work agency, and worked exclusively for Butcher’s as an Alutray Operative.
Mach Recruitment Ltd (‘Mach’) took over the supply of workers to Butcher’s, and O continued in the same role under Mach with the client. Over time, Mach started replacing workers like O, and when Mach stopped offering O work with Butcher’s, she argued that her contract of employment had transferred to Mach under TUPE and that she had been unfairly dismissed.
The Employment Tribunal (ET) found that Mach taking over from G-Staff Ltd constituted a service provision change under TUPE, as the group of workers supplied by G-Staff had been organised to perform tasks specifically for Butcher’s, and Mach had assumed responsibility for those same activities.
Mach disagreed with the ET’s findings and appealed to the EAT, arguing that the group of workers had not been deliberately organised by G-Staff to serve Butcher’s, but had instead formed organically due to operational circumstances. Mach also contended that the fluctuating number of workers and the nature of agency work meant that no stable or intentional grouping existed.
The appeal was dismissed. The EAT concluded that the ET had correctly applied the law, as evidence suggested that O, along with other work colleagues, was providing consistent services to Butcher’s. Such services were not coincidental, and Mach had failed to provide any substantive evidence to challenge O’s claim. Therefore, the ET was entitled to find that an organised grouping existed, irrespective of staff turnover.
The EAT clarified that a formal or deliberate structuring of employees is not always required for TUPE to apply to a service provision change. What matters is whether, immediately before the change, there was a group of employees whose principal purpose was to carry out activities for a particular client.
Although each case will turn on its own facts, the decision in this case emphasises that it is not always necessary for there to be a “literally conscious decision” regarding organised groupings. TUPE can apply where there is no formal or deliberate structuring of employees, thereby giving rise to a lower threshold for TUPE to apply. However, there still needs to be a deliberate organisation, with those employees identified as working for the employer’s client’s team as a settled group.
If you require further assistance, please do not hesitate to contact our HR/Legal advice line team at 01455 852 028.
