Since the TUPE regulations were revised in 2006 there has been an obligation for transferors to disclose details of the workforce to transferees. This normally takes the form of a schedule detailing the employees, their job titles and main duties and any specific contractual rights. Disclosure also extends to detailing those on sick leave and any outstanding grievances or disciplinary matters. Employers also need to be careful to adhere to data protection requirements, as emphasised by the Information Commissioner. This is normally achieved by anonymising the information.
The general view is that the disclosure requirement extends to the entire workforce (in the event of a full transfer), or at least that part of the workforce that is subject to the proposed transfer. The technical definition set out in TUPE is “an organised grouping of employees. If this grouping has as its principal purpose the carrying out of services for a particular client, this is often referred to as a service provision change. But what of employees on long term sick leave? Do they form part of the workforce?
In BT Managed Services Limited v Edwards and Ericsson Limited Mr Edwards was employed by BT Managed Services (BTMS) as a field operations engineer. His employment commenced in 1994 with Orange and he was TUPE transferred to BTMS in July 2009. He worked on a domestic network outsource (DNO) contract providing operational maintenance for Orange and EE mobile phone networks. It was accepted that the team was an organised grouping of employees situated in Great Britain which had as its principal purpose the carrying-out of activities (the DNO contract) on behalf of a client (Orange) and therefore fell within the scope of Regulation 3 of TUPE.
In May 2006 Mr Edwards commenced long term sick leave as the result of a variety of ailments including a cardiac condition which meant that he could not undertake the strenuous work required of members of the team. There were unsuccessful attempts to provide him with less strenuous work and he was regarded as permanently incapacitated from the commencement of his sick leave. He last worked in January 2008 but remained an employee so that he could enjoy the benefits available under the employer’s permanent health (PHI) scheme. Once benefits under the insurance scheme expired BTMS continued to pay him (as an expense of the DNO team).
In December 2012 the DNO contract transferred to Ericsson following a tender exercise and the service provision change took place in June 2013. At the time of the change it was accepted that there was no prospect of Mr Edwards ever returning to work. It was held in the Employment Tribunal that he was not assigned to the grouping transferred pursuant to Regulation 4 of TUPE “because he did not contribute to the economic activity of the grouping”. It is worth noting that Regulation 4 does not include any express requirement that an employee must contribute to the economic activity of the grouping so the decision was based on the Tribunal’s interpretation of the Regulation.
Employment Judge Davies found that Mr Edwards had ceased to be a part of the grouping in 2010.
…it was essentially by default that such contact as there was with him and such steps as required to be taken in relation to him, were done by the same managers; that he continued to have the [operational unit code] for the DNO contract; and that costs associated with his employment were attributed to that contract. However, in view of the other factual circumstances, that did not mean that he was as a matter of fact still assigned to the organised grouping of resources and/or employees.
What seems to me central is the decision made in 2010. as the findings of fact…make clear, an essentially pragmatic decision was taken by Mr Hunt and Mr Gilmour to keep the Claimant permanently absent to continue to receive PHI payments.
…he was not assigned to the grouping. It was not contemplated that he would thereafter provide any work or carry out any of the activities under the DNO contract. What was contemplated was simply that he would remain on the books to continue to receive his PHI payments at no cost to BTMSL.
In the Employment Appeal Tribunal BTMS said that the Tribunal should not have treated the question of where Mr Edwards would have been required to work as one of the criteria to be taken into account in determining whether he was assigned to the grouping. Mr Edwards would have been required to work in the DNO team if he was able to do so so he was assigned and the question of whether he was able to do so was irrelevant.
The Employment Appeal Tribunal disagreed with BTMS.
(a) The question whether an employee absent from work at the time of a service provision change was assigned to the relevant grouping was a matter of fact to be determined according to the circumstances of each case.
(b) Although absence from work, even lengthy absence, as at the time of the service provision change would not necessarily mean that an employee was no longer assigned to the grouping, an employee who had no connection with the economic activity of the grouping and would never do so in the future could not be regarded as assigned to that grouping.
(c) There is a clear link between the identification of the relevant organised grouping and the question of who is assigned to that grouping.
(d) As the organised grouping subject to the service provision change is defined by Regulation 3(2) by reference to the economic activities its purpose is to pursue, an employee who plays no part in those activities and will never do so is not assigned to that grouping. Mere administrative connection to that grouping is insufficient to constitute an employee as being assigned to the grouping in the absence of some participation in the grouping’s economic activity.
It should be emphasised that this decision should be taken very much on its own facts. While it is easy to say that “as a matter of fact” someone is or is not in a grouping of employees there are numerous instances in which reaching that conclusion is not so straightforward. It is certainly the case that employees on sick leave, including long term sick leave, will still form part of the grouping for the purposes of TUPE. It is also important to remember that Regulation 4 does not include a requirement that an individual must be contributing to the activities of the grouping in order to be a part of the grouping. What seems to have made the difference in this case is that, prior to the transfer, it had been concluded (and appeared not to be disputed) that Mr Edwards would never ever return to work in the DNO team. Presumably this conclusion had been reached in order to trigger payments under the PHI scheme. Without reaching this conclusion prior to the transfer it would be far more difficult to argue successfully that an employee could not be part of a grouping.