Transfer of Undertakings : Service Provision Change – Preliminary issues
Transfer of Undertakings (Protection of Employment) Regulations 2006 regulation 3(3)(a)(i) – service provision change – organised grouping of employees – principal purpose
The Claimants had been employed by the Tees Esk and Wear Valleys NHS Foundation Trust – the Second Respondent before the ET (the Appellant) – as part of an organised grouping of employees put together to look after CE, an individual in the care of the Second Respondent. Over time, CE had improved such that his need for assistance had reduced from seven-to-one to largely one-to-one care. The team put together by the Second Respondent had, however, been retained and had maintained its identity, albeit that the staff concerned were required to undertake work for other service users, also under the Second Respondent’s care, in the same location. That remained the position up to 5 January 2015, when the contract to provide care for CE was taken over by the Danshell Healthcare Ltd – the First Respondent in the ET proceedings. The Second Respondent contended this was a relevant transfer (a service provision change) for TUPE purposes and that the employees assigned to the team organised to provide care for CE would therefore transfer into the First Respondent’s employment. The First Respondent disagreed – as did the employees concerned (who preferred to remain in NHS employment) – but reluctantly agreed to employ those who the Second Respondent was refusing to treat as still in its employment. A number of the employees thus affected brought claims in the ET.
A Preliminary Hearing was listed before the ET to determine (1) whether there was a transfer for TUPE purposes, and (2) whether any of the Claimants had been assigned to the relevant organised grouping of employees prior to the transfer. The ET concluded that there was a change in the provision of the service – care for CE – from the Second to the First Respondent. Furthermore, there was an organised grouping of employees, put together to provide that service, that maintained its identity up to 5 January 2015, and 11 employees had been assigned to that grouping, including the Claimants. Given that the employees concerned undertook other work, however, the ET considered the principal purpose of the grouping had been diluted such that, by 5 January 2015, it was no longer the provision of care to CE. There was, therefore, no service provision change for the purpose of regulation 3(3) TUPE. There being no transfer for TUPE purposes, the ET further declared that the Claimants were at all times employed by the Second Respondent and not at any time by the First Respondent. The Second Respondent appealed.
Held: Dismissing the appeal on the question of principal purpose but allowing the appeal against the ET’s declaration as to the identity of the Claimants’ employer
The determination of principal purpose (regulation 3(3)(a)(i) TUPE) required the ET to answer the question: what did the organised grouping have as its principal purpose immediately before the service provision change? The activities actually performed might be relevant to the determination of purpose, as might the intention behind the organisation of the grouping; neither was necessarily determinative. In the present case, allowing that purpose may change over time, the ET had properly focused on the period immediately prior to the service provision change. By that stage, allowing that the principal purpose need not be the sole purpose, the ET found that the dominant purpose of the organised grouping was the provision of care to other service users; by then, care for CE was merely a subsidiary purpose of the group. Given its primary findings of fact, that was a permissible conclusion for the ET in this case.
As for ET’s declaration as to the Claimant’s employment by the Second Respondent, this was not an issue before it at the Preliminary Hearing and the parties had not addressed the point. The declaration could not stand.
Eady QC HHJ
 UKEAT 0173 – 16 – 0303
England and Wales
Updated: 24 March 2022; Ref: scu.582067