TUPE Update

A recent decision by the Employment Appeal Tribunal has provided some clarification on ‘assignment’ of employees under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (as amended). In the matter of BT Managed Services Vs. Edwards and Anor, it was reported that Mr Edwards was part of a team of employees working on contract. He had unfortunately been on long-term sick leave since 2006 and, due to his condition, was unable to return to work at all. In order for Mr Edwards to remain on his employers health insurance scheme, it was necessary for him to retain his employee status. However, following an insolvency sale, Mr Edward’s team transferred out under the TUPE regulations. The new employer argued that Mr Edwards did not transfer as he was only an employee for administrative purposes and as such he was not assigned to the group that did transfer out. The EAT agreed. However, Judge Serota QC, sitting alone, indicated that both the definition of the grouping and the actual status of the employee were a distinguishing factor in making a decision; a temporary inability was distinct from a permanent one in the definition of a work grouping in this instance.

The case underlines the benefit of studying the background and particulars of employees in any acquisition of a business’s assets. Given the subjective nature of the assignment and grouping of transferred employees, there may be significant savings, or indeed costs, in any asset acquisition. If you need advice in this regard, please contact us.