The Employment Appeal Tribunal (EAT) has provided some useful guidance on the use of Transfer of Undertakings Regulations (TUPE) exemptions for public administrative functions.
In Nicholls & Anor v London Borough Of Croydon & Ors, most of the staff in the public health team at Croydon Primary Care Health Trust were transferred to Croydon Council in April 2013. The claimants remained at the council for two years until it wanted to change their terms and conditions of employment.
Initially, the council invited the claimants to agree to vary their terms and conditions. This offer was not accepted by any of the claimants. Four of them resigned and claimed constructive dismissal. The council then went on to dismiss the remaining ten claimants and offered to re-engage them on new terms. Six of them accepted re-engagement, four did not. The claimants brought claims for unfair dismissal. According to the judgement there were two issues:
1. Whether there was a “relevant transfer” for the purposes of TUPE Regulations?2. If there was a relevant transfer, whether each of the claimants’ employment with the Trust was transferred pursuant to the operation of regulation 4 of the TUPE Regulations?
The tribunal answered “No” to each of these questions.
Writing for HR Law Live Charles Pigott, professional support lawyer at Mills & Reeve, explained that in deciding whether there had been a TUPE transfer in 2013, the council had argued that it had been a transfer of public administrative functions which fell outside TUPE. The employees argued that the Trust’s public health team had been carrying out an economic activity, and that TUPE therefore applied.
The tribunal accepted the council’s argument, but did not explain how this matched its finding that: “all, or almost all, of the work done by the public health team could be, and in fact was, offered by non-state actors operating in the same market”. The case was remitted to a new tribunal.
“It follows that we have no final decision on this dispute,” says Pigott. “However, the EAT has undertaken a particularly thorough review of the case law which will be useful in future cases. This includes a look at work areas where TUPE may not apply. These include:
general and fiscal administration, security and national defence; regulatory functions; and post which contribute to particular tasks of public administration.“It will not be easy for the new tribunal to work out where to draw the line. But it is clear that it will need to take a very careful look at the tasks the public health team were performing at the point their employment was transferred to the council.”
Writing in Lexology, Charlotte Bloomfield, managing associate at Womble, Bond Dickinson, said that this was an interesting case due to its technical argument on the meaning of 'undertaking', 'economic entity' and 'administrative function'.
“The EAT decision provides a useful summary of the elements to be considered when determining whether there is an undertaking capable of transfer by virtue of TUPE, but more particularly it provides a clear and comprehensive picture of the case law (both domestic and European) relating to each of the material factors to be considered, particularly in relation to services or entities performing functions within the public sector,” she said.
