An interesting “TUPE question” came before the EAT in July. The case is Nottinghamshire Healthcare NHS Trust v (1) Hamshaw & Ors (2) Perthyn (3) Choice Support, EAT on 19 July 2011.
Hillside House was a care home in Bassetlaw run by Nottinghamshire Healthcare NHS Trust. The seven residents were supported by healthcare assistants, who in turn were managed and supervised by qualified nursing staff. Residents were monitored and managed on a 24 hour basis with active night staff. All the staff, 18 in total, were employed by the Trust.
At the end of March 2010, following a change of policy at the Trust, Hillside House was closed. The residents were re-housed into homes of their own, under tenancy agreements with a local housing association. Care was no longer provided by the Trust, but instead by two agencies called Perthyn and Choice Support.
The Trust advised all the staff that the TUPE regulations applied, so that their employment would automatically continue on the same terms as previously but now with Perthyn (in the case of two or three individuals) and Choice Support in the case of the others. The Trust ceased to pay the employees with effect from 1 April 2010.
It seems (the EAT judgment does not actually say) that Perthyn and Choice Support were not prepared to take on the employees on the same terms as those on which they had been employed by the Trust. Accordingly the employees brought various claims, including claims for unfair dismissal, outstanding holiday and redundancy pay. Playing safe, they filed their claims against all three of Nottinghamshire Healthcare NHS Trust, Perthyn and Choice Support.
Not surprisingly, the question then arose at a preliminary hearing as to which should properly be respondent(s) to the claims. The answer depended on whether, as a matter of law, the TUPE regulations applied: if they did, then the employment of the staff had automatically transferred to Perthyn and Choice Support; if, on the other hand, they did not, then there would have been no such automatic transfer of employment, so the claims should properly be made against the Trust.
An employment judge ruled that the Trust’s belief was wrong. The TUPE regulations did NOT apply and so the Trust was the employer against which the claims should be made.
Overall, the important points the judge took into account resolved themselves into one simple fact – the services provided for the former residents of Hillside House, and the activities carried out by the staff, changed fundamentally once Hillside House was closed. There was no discernible economic entity which retained its identity throughout, and TUPE simply did not apply. Apart from the obvious difference between a care home and an individual flat, there was a difference in staff duties. At Hillside House, staff had worked “active” night shifts – awake and on duty. In contrast once the former residents had transferred to their own accommodation, the nominated member of staff would – in many cases – simply sleep in that same accommodation, effectively being no more than on call.
Nottinghamshire Healthcare NHS Trust lost its appeal to the EAT. Technically (for “TUPE aficionados”) the appeal was on two separate bases, but in any event the Trust lost on both. The clinching argument, in the end, was simply that the main issues were issues of fact – and as such they could not be reconsidered by the EAT unless they were “perverse” or were so defective that justice required the whole matter to be reconsidered. This of course did not prevent the EAT going into the matter in some detail, which it did before concluding that the original judge “was entitled to find that the service after transfer was “fundamentally different’ from that which had operated at Hillside House and that there was therefore no relevant transfer” for purposes of the TUPE regulations.
There are two important lessons to be learnt from this case. The first is specific – the TUPE regulations do not apply where there is a change of employer but the economic entity for which staff work(ed) does not retain its identity and the services they provide have changed in a fundamental way. The second is far more fundamental: as a general rule it is a waste of time and money to appeal to the EAT if the point at issue is very fact dependent, even if it involves a point of law (without which it would not be within the remit of the EAT to consider in the first place).