Ottimo Property Services - the implications for Shared Services and Outsourcing

The implications of a staff transfer under TUPE is generally well understood when outsourced services are retendered. Similarly, the "shattering effect" of splitting an existing service between multiple clients has been seen to remove the impact of TUPE when the services are changed. However, the recent case of Ottimo Property Services Ltd v Duncan and another UKEAT/0321/14, 9 January 2015 now raises the possibility that TUPE will apply when services provided as part of a shared service are retendered.

This appears to be the first time that the Employment Appeals Tribunal ("EAT") has considered whether the rules relating to a staff transfer can apply where there is more than one client or service user. The EAT's decision in this case confirms that, in principle, there can be a staff transfer involving a group of clients where there is a sufficient link between the clients and their identity remains the same through the service transfer.

This has potential ramification for outsourced services and for shared services. It cannot be assumed, therefore, that a staff transfer does not occur merely because there are multiple service recipients and TUPE will need to be considered when such services are retendered.

The decision of the EAT has established the principle, but it also remitted the case back to the original employment tribunal to decide the case. The facts of this case will not relate to every transaction but establishment of the principle reinforces the need to consider TUPE on a case-by-case basis. 

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