Case update: Are subsequent events relevant to whether a task was intended to be of short term duration?

21 January 2016

Employment Appeal Tribunal ("The EAT"), in allowing an appeal in the case of ICTS UK Ltd v Mahdi and others, has held that subsequent events may be relevant in assessing the client’s intention as to whether or not a task was intended to be of “short-term duration”.

This case concerned a change in provider of security services following the closure of a university campus and subsequent plans for its redevelopment. In order for there to be a service provision change, the client must intend that the relevant activities will, following the service provision change, be carried out by the transferee other than in connection with a task of short term duration. The facts are as follows:

ICTS UK Ltd (ICTS) provided security services to Middlesex University at its Trent Park campus.  That campus closed in 2012 and was vacant until it was purchased by a Malaysian university (AUCMS).  AUCMS planned a major redevelopment of the site.  

ICTS continued to provide security services to AUCMS following the purchase, and offered to enter into a new contract with them.  However, AUCMS appointed a new security company, First Call Secure Group Ltd (First Call) in November 2013.

First Call sent a letter to ICTS on 11 November 2013, refusing to take on any of the ICTS security guards because it said there had been no relevant transfer under TUPE.  Ten ICTS security guards brought claims against both ICTS and First Call.  In response to these claims, First Call said that they had entered into a contract to secure a site that was intended to be redeveloped.  The Tribunal accepted that the activities were intended to be carried out in connection with a task of short-term duration, and so TUPE did not apply.  The employment judge considered that it was AUCMS’ intention as at 11 November 2013 that was relevant, and that he could not look at subsequent events in order to determine that intention.  He found that it was logical to infer that the site would only remain unoccupied for a limited period while the redevelopment took place.  This was despite the fact that there was no evidence as to how long this period was likely to be as First Call did not attend the Tribunal hearing.

ICTS appealed on three grounds:

  1. The employment judge was wrong to completely ignore events after 11 November 2013. ICTS argued that the judge should have made his findings based on the unchallenged evidence of ICTS and considered it when determining AUCMS’s intention. This was upheld and the EAT confirmed that subsequent events can be relevant in deciding someone’s intention. The EAT added that it would be an error of law to ignore such events and fail to make findings of fact about them if they were potentially relevant.
  2. The employment judge misapplied the burden of proof – it was argued that since First Call called no evidence and the alleged agreement on which they relied was found to be bogus, they could not have satisfied the burden on them. The EAT rejected this ground of appeal and confirmed that the employment judge was entitled to reach a view as to AUCMS’ intention on the basis of inference regardless of what evidence First Call did or did not call.
  3. The employment judge was perverse in wholeheartedly accepting the contents of a letter which emanated from a party (First Call) who had deliberately failed to appear or provide evidence, and had been found by the same judge to have produced and relied on a bogus agreement. The EAT also rejected this ground of appeal in finding that the employment judge was not “obviously wrong” to accept the letter’s contents as true and therefore take them into account when considering AUCMS’ intention.

While noting the impact on the employees, who had been entirely blameless and for whom the EAT had great sympathy, nevertheless the EAT decided to remit the case to the Tribunal.

The relatively recent case of Horizon Security Services v Ndeze reminds us that simply relying on the ultimate outcome in order to evaluate the intention at the relevant time is not correct. However, organisations should be aware that when the courts are trying to determine whether a task is of short term duration, events after the transfer date may still be highly relevant in ascertaining what the relevant intention was at the time.

Further information

Should you be affected or have any questions about the issues raised in this blog, please contact Kirsty Churm or a member of our employment team.

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