McCarrick v Hunter: Shaen Catherwood succeeds in Court of Appeal

The Court of Appeal (Maurice Kay LJ, Dame Janet Smith, and Elias LJ) has handed down Judgment in McCarrick v Hunter in which Shaen Catherwood appeared successfully for the Respondent.

The principal ground of appeal concerned whether there can be a service provision change (SPC) under regulation 3(1)(b) of TUPE in circumstances in which the client changes as well as the service provider.

Mr McCarrick was employed by a company (A) to assist in the management of a property portfolio on behalf of another company (B). The mortgagee of the properties appointed Law of Property Act receivers who in turn appointed managing agents. Mr Hunter, who had an interest in the property portfolio, agreed to assist with the management of the properties during the period of the receivership and for that purpose employed Mr McCarrick. Thus there was not only a change of contractor (and employer) from A to Mr Hunter but also a change of client from B to the mortgagee (or possibly the receivers or managing agents). Mr McCarrick was subsequently dismissed by Mr Hunter. In order to establish one year’s service for the purposes of his unfair dismissal claim he needed to show that he had continuity of employment predating the commencement of his employment by Mr Hunter.

The employment tribunal held that there was an SPC on these facts (from A to Mr Hunter) such that Mr McCarrick’s continuity of employment was not broken when he stopped being employed by A and became employed by Mr Hunter. The tribunal also considered that there was no business transfer under regulation 3(1)(a) of TUPE. The EAT (Slade J presiding) allowed Mr Hunter’s appeal, holding that there could be no SPC where the client changed identity as well as the contractor. However, in light of the significance of the point, the EAT gave permission to Mr McCarrick to appeal to the Court of Appeal.

Elias LJ, giving the leading judgment in the Court of Appeal, rejected Mr McCarrick’s argument that, although the literal wording of regulation 3(1)(b) was against him, determining the scope of the provision required a purposive reading. His Lordship said: "The concept of a change of service provision is not complex and there is no reason to think that the language does not accurately fall within the scope of this purely domestic protection."

The Court of Appeal also dismissed Mr McCarrick’s second ground of appeal by which he contended, in the alternative, that the employment tribunal and EAT should have found that there was a conventional business transfer under regulation 3(1)(a) of TUPE.

The case has been watched with considerable interest by commercial property businesses and by businesses in other industries in which the engagement of contractors is widespread.

Shaen was instructed by Wilsons Solicitors LLP.

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