In Nottinghamshire Healthcare NHS Trust v Hamshaw the EAT held that where a residential care home for vulnerable adults which had been operated by the NHS closed and the residents were returned to their homes and care transferred to two private sector care providers, TUPE did not apply. The EAT upheld the tribunal’s finding that there had been ‘fundamental changes’ in the ethos of the service and the manner of its provision. It changed from ‘institution to home; from management to support’. There were differences in daily routines of the patients and a difference in staff duties. There had been a transfer of staff and residents but not of premise, equipment, resources and organisation.

The EAT agreed that for the purposes of TUPE, the economic entity did not retain its identity after the transfer and the services provided were not ‘fundamentally or essentially the same’ after the change (service provision transfer).

This decision will have important ramifications for both NHS employers and private companies taking over the care services from NHS bodies. If TUPE does not apply in these scenarios, NHS bodies will be left holding the tab for liabilities and dismissals which would otherwise have transferred to the new service providers.