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Law for Business

Knowhow - guidance - precedents

12 SEP 2012

Supply of goods and service provision change

The case of Grace v Geo W King Ltd went before the EAT to decide whether the process of assembling car components is a service for the purposes of a TUPE service provision change, or is a supply of goods (which is excluded from the TUPE Regulations).

The EAT referred to the ET's finding of fact, at first instance, that the production of components, including checking them for safety, was ‘wholly or mainly' a supply of goods, and agreed that this was a finding of fact within the ET's remit to make. The EAT held that it was analogous to the example given in the Department of Business, Innovations and Skills' guidance that a contractor engaged to supply sandwiches and drinks to a client's canteen for sale by the client's own staff would constitute a supply of goods and therefore TUPE would not apply when the contract was awarded elsewhere, even where the first contractor had a dedicated team assigned to making the sandwiches for that particular contract. In this case, therefore, there was a supply of goods and no service provision change for TUPE purposes.

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