TUPE transfer: new security contractor takes over equipment but not staff

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In Securitas v ICTS Portugal the CJEU held that there can be a transfer of an undertaking when 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 the equipment which is essential in order to deliver those services.

Securitas took over the contract for security services at a port in Azores but refused to transfer the 17 staff, employed by the previous contractor ICTS, to its employment. The Portuguese Supreme Court referred questions to the CJEU with regards to the application of the Acquired Rights Directive to the Portuguese Labour Code on transfers.

The CJEU stated that when there is a service that is solely based on manpower, there would be no transfer of employees to a new provider as an economic entity will not retain its identity. However, if an economic entity is based mainly on equipment then not taking on employees won’t stop a transfer occurring. In this case, the court would need to decide whether ICTS had transferred to Securitas any equipment or assets purely for the purpose of security activities. If this was the case then there would have been a transfer.

Written by

Rachael Jessop
21st November 2017