TUPE - Service Provision Changes

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) apply to any size of business and protect the employment rights of employees when their employer changes as a result of a relevant transfer. This occurs when there is a transfer of an economic entity that retains its identity or when there is a service provision change – i.e. when services are contracted out, contracted in or where a contract is assigned to a new contractor on subsequent re-tendering. When determining whether or not there has been a service provision change, the Employment Tribunal (ET) must consider whether the service provided after the change was fundamentally or essentially the same as that provided before it took place. The answer to this question will be one of fact and degree, to be assessed on the individual facts of the case.

In Nottinghamshire Healthcare NHS Trust v Hamshaw and others, the Employment Appeal Tribunal (EAT) upheld the ET’s decision that there was no relevant transfer for the purposes of TUPE when residents of a care home operated by an NHS Trust were moved to individual homes and the care workers, who had previously been employed by the Trust, were offered employment with the new care providers.

Hillside House, a residential care home for adults with learning difficulties, was closed on 31 March 2010, and the residents were re-housed in individual flats under the care of either Perthyn or Choice Support, firms specialising in care provision. At Hillside House, residents were supported by healthcare assistants who were managed and supervised by qualified nursing staff. Residents were monitored and managed on a 24-hour basis and staff worked ‘active’ night shifts. Once transferred to their own accommodation, the former residents were encouraged to develop greater independence. Each was allocated a care worker, who would be on hand to assist when needed and would sleep in the client’s flat.

Nottinghamshire Healthcare NHS Trust informed the care workers that the change constituted a relevant transfer within TUPE and their employment was to continue with either Perthyn or Choice Support. The care providers disagreed. The care workers brought claims against the Trust for unfair dismissal and outstanding holiday and redundancy pay.

The ET found that there were important changes in the daily routines of the clients after the move that marked the commencement of a new phase of residential care and support and represented a ‘material shift in the ethos of the service and the manner of its provision’. The aim was that they should be as independent as possible with support rather than visible management. In the ET’s view, the economic entity of Hillside House had not retained its identity after 31 March 2010. Furthermore, the activities carried on by Perthyn and Choice Support were materially different from those carried on by the Trust at Hillside House before the transfer.

The EAT agreed with the judgment of the ET and dismissed the Trust’s appeal.