A recent case involving an NHS trust has demonstrated that, for a group of employees to transfer to a new contractor under TUPE, it is essential that they are organised for the principle purpose of carrying out the end client’s particular work.
The service provision change part of TUPE says that where there is an outsourcing, re-contracting or insourcing, the incoming contractor must take on those employees employed by the outgoing provider. But only where there is an organised grouping of employees which has, as its principle purpose, the carrying out of the activities concerned on behalf of the end client.
This case has shown that whether the group of employees meet the criteria for the TUPE transfer has to be assessed at the time of the transfer and that historical arrangements that have been diluted overtime will not be sufficient.
The case involved a patient (P) who needed extensive care due to severe learning difficulties. The local NHS care commissioning group (CCG) awarded a contract for the care of P to a local NHS foundation trust (the Trust). The care initially involved a team of 27 dedicated carers.
P lived in a building that contained a number of flats that all housed service users requiring specialist care.
P’s condition gradually improved so that over time his care needs reduced from needing seven-to-one care initially to one-to-one care. When he then moved into a different flat within the same block, the team looking after him was reduced to 11 people, who now also cared for other service users in the building if required.
When the CCG put the contract for his care out to tender, a new contractor, Danshell, was successful. They took over the care of P from January 2015. The Trust alleged that seven carers should transfer to Danshell under TUPE, these seven being carers who had cared for P for more than 75% of their shifts during the previous year.
This was challenged by the employees, who wished to remain employed by the Trust.
The Employment Appeal Tribunal found that as the employees cared for other residents, the principle purpose of the grouping of employees had been diluted, such that by the time of the alleged transfer in January 2015, its principal purpose was no longer the provision of care to P. In particular, an analysis of their working hours showed that as a group they worked 125 out of 375 hours per week caring for P.
So looking at the position immediately before the alleged transfer, the principal purpose of the group of employees was no longer the care of P. By January 2015, the group’s dominant purpose was providing care to other service users in the block of flats. So there was no service provision change and they remained employed by the Trust.
The arguments put forward by the trust as to why there should be a TUPE transfer, based on the employees spending the majority of their time working on the contract, and the desire amongst outgoing contractors to transfer employees onto the new contractor, is something we come across commonly in practice when dealing with re-contracting situations.
If you are a business involved in taking on new contracts in the services sector and are concerned about the extent of your TUPE obligations, then please do not hesitate to contact Ben Stepney in our employment team. The case discussed in this article was Tees Esk & Wear Valleys NHS Foundation Trust v Harland and others.