TUPE transfer: new security contractor takes over equipment but not staff
09 November 2017
With thanks to Daniel Barnett’s employment law bulletin which provided the details of this case.
Can there be a transfer of an undertaking where a new contractor takes over security services from a previous contractor without accepting the employees assigned to that work, if the new contractor takes over equipment essential to delivering those services?
Yes, held the CJEU in Securitas v ICTS Portugal. Securitas won a contract for security services at a port in the Azores, refusing to accept that 17 staff employed by the previous contractor ICTS had transferred to its employment. The Portuguese Supreme Court referred to the Court of Justice of the European Union (CJEU) questions as to the application of the Acquired Rights Directive to the Portuguese Labour Code on transfers.
The CJEU noted that where an activity is essentially based on manpower, when a new provider does not take on employees, an economic entity won't retain its identity so there would be no transfer, but if an economic entity is based essentially on equipment, not taking on employees won't stop a transfer occurring.
The national court must decide whether ICTS had transferred to Securitas equipment, or tangible or intangible assets for the purpose of security activities. If so, there would have been a transfer. The Portuguese Supreme Court referred questions to the CJEU as to the application of the Acquired Rights Directive in this situation.