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Employment Law

Legal guidance - compliance - software

11 SEP 2015

Should an employee who is permanently off sick be TUPE transferred to a new employer with the rest of their team?

Should an employee who is permanently off sick be TUPE transferred to a new employer with the rest of their team?

Mark Stevens
Associate, Veale Wasbrough Vizards

The Employment Appeal Tribunal (EAT) said that an employee of BT Managed Services (BT) who had been off sick for over five years did not transfer to a new employer, Ericsson, along with the rest of his team under the TUPE regulations.

This was because the EAT were satisfied that the employee was having no economic participation at BT Managed Services and no expectation of returning, and could not therefore be said to be assigned to the organised grouping of employees who were subject to the TUPE transfer. The case of BT Managed Services Ltd v Edwards gives guidance for employers facing similar situations.

Background

Mr Edwards worked in BT's domestic network outsource (DNO) team. Unfortunately, he developed significant cardiac problems which resulted in him being signed off work permanently. He last worked in 2008 and, from that date, remained 'on the books' of BT solely in order that he could continue to receive Permanent Health payments. His payments were classed as the DNO team's expenses.

Following a tender process, the DNO team transferred to Ericsson in accordance with the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). This amounted to a service provision change under the TUPE rules, meaning that all the employees who were assigned to the organised grouping of employees who undertook DNO work automatically transferred to Ericsson.

The Employment Tribunal were asked to consider whether Mr Edwards was part of the organised grouping of employees at BT and therefore whether he too should move to Ericsson. The Tribunal held that he was not part of the group because he did not contribute to the economic activity of the team.

BT appealed this decision to the EAT.


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Decision

The EAT decided that a mere administrative or historic connection is not enough to determine that an employee is 'assigned' to a group transferring to a new employer under the TUPE Regulations. In order to be assigned to the organised grouping, the EAT said that an absent employee "will generally require some level of participation or, in the case of temporary absence, an expectation of future participation in carrying-out the relevant activities on behalf of the client". This will be a matter of fact to be decided upon in each case.

Best practice

This is a noteworthy case for employers with staff who are on long term sick leave with no prospect of return, or those companies tendering for work where historic issues of this nature arise.

There was a clear difference made between employees who are on long-term, but temporary sick leave or maternity leave and those (such as Mr Edwards) who are on permanent absence. In the former cases, those employees, whilst perhaps absent on the transfer date itself, will still be assigned to the organised grouping of employees and transfer as a result.

We recommend that employers keep a good record of those employees on long term sickness absence and that employers tendering for work undertake detailed due diligence in respect to those employees in order to ascertain whether there is any prospect of those employees returning to work and participating in the team's activities. 
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