Sick employees and TUPE

BT Managed Services v Edwards

The issue in this case was about who does and who does not transfer. In particular, is a long-term sick employee who is not working “assigned immediately before the transfer” so that their employment transfers under TUPE?

Mr Edwards was considered to be permanently sick. There were no prospects of him returning to work but BT had kept his employment going so that he could benefit from a Personal Health Insurance(PHI) scheme and, once that had come to an end, similar payments from BT.

There was a service provision change. The new service provider went on to claim that Mr Edwards had not transferred to become its employee. The Employment Tribunal agreed. It held that Mr Edwards was not assigned to the organised grouping because he did not contribute to its economic activity.

The Employment Appeal Tribunal upheld that decision. Mr Edwards was not participating (and was not expected to participate) in the activities carried out by the group. An employee who had no connection with the economic activity of the grouping and would never have one in the future could not be regarded as being assigned to that grouping. Mere administrative connection is not enough; there needs to be some participation in the group’s economic activity.

This decision should be treated with some caution. It does not mean that no long-term sick employees will transfer under TUPE. The prospect of the employee returning to work, and their contribution to economic activity are crucial factors in determining whether or not they will transfer.