In an interesting case before the EAT this week, the court has considered whether an employee on long-term sick leave must necessarily be regarded as still “assigned” to his former team and, therefore, as a transferring employee for the purposes of regulation 4(3) of the TUPE Regulations.
Mr Edwards worked as a mobile phone network operative when he commenced a period of prolonged sick leave, due to a heart condition. His final working day was in 2008. He nonetheless remained an employee of the business, initially to preserve his access to permanent health insurance (“PHI”) benefits but, once that scheme had been exhausted, was “kept on the books” for administrative convenience (largely to prevent backfill of his position).
At no time during his absence was Mr Edwards’ job role or position altered, although it was accepted he was likely never to return. Furthermore, his only contact with the company was occasional and described as “pastoral” in nature. However, some 5 years later, in 2013, the team of which he notionally remained a member, was contracted-out on a service provision change. The issue then arose whether Mr Edwards’ employment transferred by reason of operation of TUPE, it being accepted that his team was an “organised grouping” for this purpose. This question turned on whether he was still deemed “assigned” to that team, notwithstanding his estrangement.
Employment tribunal decision
The employment tribunal found that he was not so assigned for TUPE purposes. It accepted that, once his employer took the decision that Mr Edwards would no longer provide any work or carry out any activities, but would be retained for pragmatic purposes only (i.e. to retain his PHI payments and thereafter for contractual and administrative convenience) he ceased as a matter of fact to be assigned to the relevant organised grouping.
Before the EAT, lengthy argument arose as to whether previous cases could support that conclusion, given that decisions such as Botzen vRotterdamsche Droodok Maatschappij BV, had confirmed as a matter of principle that temporary absence from employment, such as due to sickness or maternity, does not exclude individuals from transfer.
In conclusion, the EAT rejected the contention that assignment within the meaning of regulation 4(3) of TUPE in any given case is dependent upon identifying in which group an individual might be required to work, were he or she able to do so. Adopting a more pragmatic approach, the EAT found that, whilst a link between the employee and the transferring work may prove sufficient to satisfy “assignment”, it requires something more than mere administrative or historical connection. “Assignment” will generally require some level of participation in carrying out the relevant activities on behalf of the client, which are the principal purpose of the organised grouping. Indeed, the Judge observed that the identity of an organised grouping is in part defined by the work it carries out so a person who plays no part in the performance of that work cannot reasonably be said to be “assigned” to it. To this extent he distinguished permanent inability to work from temporary inability.
The case is perhaps unusual in that Mr Edwards’ employment, even notional, continued for so many years despite both his absence and there being no prospect of a return. Even so, there can be various reasons why employers opt to retain employees “on the books” long term, normally without pay, when they are unable to work.
Encouragingly, both the ET and EAT drew a common-sense conclusion that, by the date of transfer, Mr Edwards was so removed from the business that transfer of his employment would have been entirely artificial and was not within the principles of employment protection upon which TUPE is founded.
Employers in a similar situation will still need to continue to assess employees on sick leave and the likelihood of return, since this case is only likely to be of assistance if permanent absence is relevant. If the employee’s absence is in circumstances where there is every expectation of a return to work, such as for maternity or other family type leave, or most types of sickness absence, then the employee is very likely still to be regarded as assigned to the organised grouping. However, determining extended “temporary” absence from “permanent” may not always prove straight-forward.