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Sick absent employee did not transfer under TUPE

Posted by TonyBrownEmploymentSolicitor on July 26, 2016

Who takes responsibility under TUPE for an employee who is on long-term sick leave and is not expected to return to work? The Employment Appeal Tribunal (“EAT”) has upheld a tribunal decision that an employee who was on indefinite sick leave did not transfer under TUPE when there was a change of service provider.

In that case, the Claimant was employed by BT Managed Services Limited (BTMS) as a field operations engineer until he developed a heart condition which prevented him from working.

There was no prospect of him ever returning to work. He remained employed by BTMS in order to benefit from PHI payments. Even when the PHI payments ceased, he remained on BTMS' books and was in receipt of some payments from them.

Five years after the Claimant began sick leave, a service provision change resulted in the maintenance contract on which the Claimant had worked previously transferring from BTMS to Ericsson.

There was no dispute that TUPE applied and that the BTMS team working on the contract would transfer to Ericsson. BTMS argued that the Claimant should be included in the transfer but this was disputed by Ericsson.

An ET ruled that the Claimant had not transferred under TUPE because he was not assigned to the organised grouping of employees as he did not contribute to the economic activity of the group. This meant that he should remain employed by BTMS.

The Employment Appeal Tribunal (EAT) dismissed BTMS’ appeal for the reason given by the employment tribunal.

The EAT also rejected an argument that the question of whether an absent employee is assigned to a particular grouping can be answered in all cases by analysing to which grouping the employee would return if they were able to do so. While this question is helpful in circumstances where an employee is able to return to work at the time of the service provision change, or is likely to be able to do so in the foreseeable future, it has no relevance in circumstances where an employee is permanently unable to return.

What does this mean?

According to the EAT, the "organised grouping” in TUPE is defined by the work it carries out, meaning that a person who plays no part in the performance of that work, and can never do so in the future, cannot be assigned to the organised grouping.

The ruling in this case is probably limited to employees who are both on long term absence and who have no real prospect of returning. It will not apply to employees who are only on short term absence, or those who are on longer term absence but have some prospect of returning. They will still be considered to be assigned to the organised grouping of employees and will therefore transfer.

The EAT may not have had the last word because BTMS has been granted leave to appeal to the Court of Appeal. There is no indication when the appeal will take place.


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