Nottinghamshire Healthcare NHS Trust v Hamshore & Others
The Transfer of Undertaking Regulations continue to exercise the courts. Sometimes it benefits an employee if they do not apply. This happened in Nottinghamshire Healthcare NHS Trust v Hamshore & Others, UKEAT/0037/11/JOJ, where both limbs of the Regulations were considered. The facts were that residents of a Care Home operated by an NHS Trust were rehoused in individual homes run by the respondents who then offered the claimant care workers, previously employed at the Care Home, employment. The new jobs required the carers to sleep in the service users homes. The two questions that arose were whether the economic entity that was the original Care Home had retained its identity, and secondly whether the services provided were fundamentally or essentially the same after the change as they had been before the change.
Somewhat unusually, it was the old employers who were arguing that this was a TUPE transfer. The reason they argued this was to avoid any potential liability for unfair dismissal, pay in lieu of notice and a contractual redundancy payment as well as a protective award for failure to consult about the proposed transfer. The claimants were represented their union and wanted to be able to claim all of these rights which would not have been available if the TUPE regulations had applied.
As is well known, the purpose of the transfer regulations is to provide employees with protection. For this case the best protection to be provided to the employees was if TUPE did not apply. The Trust argued that as each of the former residents continued to receive supported living and welfare services through the Local Authority there was, in practice, a retained economic entity.
This argument failed to impress the Employment Appeal Tribunal, which observing that whilst care assistants and the residents transferred, the premises, equipment, resources and organisation that had previously comprised the Care Home maintained by the NHS Trust, did not. Accordingly it had not retained its identity and came outside the ambit of the Regulations. This did not deter the NHS Trust, which went on to argue that if this was not a transfer of an undertaking in the first sense, it was a service provision change within the 2006 Regulations.
One of the interesting facts that emerged from the legal analysis that then followed was that the service provision changes in TUPE do not derive from a European model. They are an addition to the requirements of the European directive, grafted on to attempt to provide additional certainty. According to the Employment Appeal Tribunal, this means that when considering a service provision change, there is no obligation to interpret the wording of the Regulations in a purposive manner. Rather ironically, and no doubt in a way many will consider Freudian, this was contrasted by the court with a straight forward and common sense application of the relevant statutory words.
In these circumstances, the Appeal Tribunal concentrated on the activities carried on by the alleged transferees, and came to the conclusion that these duties were not identical to the activities carried on by the NHS Trust, because there were detailed differences between what the Trust had done, and what the new arrangements provided. The key question was whether or not activities carried on by the alleged transferee were fundamentally or essentially the same as those carried out by the alleged transferor. As they were not the same the argument failed. So the outcome of this case was that employees benefitted considerably from the fact that they were not the subjects of a TUPE transfer.
First published in The Grapevine Magazine August 2011
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