Back in 2005, the case of Celtec Ltd v Astley and others held that the timing of a TUPE transfer is not determined by the will of the parties but by the actual transfer of a business to a new employer in circumstances where TUPE applies. In the Celtec case, the "business" transferred from the Department of Employment, but the employees remained employed by the Department of Employment and were seconded to Celtec in order to carry out the work. They became employees of Celtec three years later. The Employment Appeal Tribunal (EAT) said that they actually transferred along with the business – so the secondment was in effect a fiction.
The recent case of Capita Health Solutions v BBC and McLean is another TUPE case where an employee was seconded to the transferee. The circumstances are slightly different. This case concerned an occupational health nurse who was unhappy about the BBC’s occupational health department being outsourced to Capita. After taking out a grievance, the BBC proposed that, if Ms McLean did not wish to transfer to Capita, it would second her to Capita for her six-week notice period. Ms McLean reluctantly agreed to be seconded for her notice period, after which her employment would terminate.
The EAT held that the application of TUPE could not be defeated by coming to an arrangement of this kind, confirming that it was not possible to both opt out of TUPE and to work for the transferee on “secondment” after the transfer. The reality was that her employment had been transferred to the transferee at the date of the transfer. Employees are entitled to object to a TUPE transfer, in which case they do not transfer and the application of TUPE requires that their employment instead terminates on the transfer date.
Many NHS trusts have used the secondment model in order to retain staff, to reach agreement with a transferee or to bide time while matters such as pension provisions are sorted out. Following Celtec, the employee objecting to a transfer has been a well-used tool for preventing employees from transferring under TUPE. However, the Capita case undermines that process saying an objection, if coupled with a secondment to the transferee, would not be effective. The case confirms that, regardless of the processes adopted, secondments are little more than works of fiction in these circumstances, which is something that both the transferor and the transferee should be mindful of.