Employee on long term sick leave did not transfer under TUPE

The Claimant was employed by BTMS Limited as a field operations engineer. His team had its own separate and dedicated structure within the company and its own costs centres. In 2006, the claimant went on long term sick leave and became permanently incapacitated without any prospect of returning to work. He was allowed to remain an employee in order to benefit under the permanent health insurance (PHI) scheme, and even after those benefits extinguished, BTMS Limited continued to make payments to him.

The team to which he was originally assigned transferred to E Limited in 2012. It was an organised grouping of employees having its principal purpose of carrying out activities for the client and, therefore, was covered by the service provision change under Regulation 3(1)b of the TUPE Regulations 2006. However, E Limited argued that the claimant did not transfer as he was not assigned to the group.

The EAT has upheld the Employment Tribunal’s decision that, although there was a link between the Claimant and his team, it was only for administrative purposes and it was not contemplated that the Claimant would thereafter provide any work or carry out any activities for the team. The Employment Tribunal decided that the Claimant ceased to be assigned to the team in 2010. This was upheld by the Employment Appeal Tribunal. It said that a link between the employee and the work carried out was sufficient in itself to constitute an assignment to a relevant organised grouping, but there must be something more than more administrative or historical connection. There must be some level of participation or an expectation of future participation. In this case, there were neither. Given the identity of the team is defined by the work it carries out, a person who no longer plays a part in the performance of that work cannot be a member of the team, and this is not assigned.

This case is most likely to turn on its own facts, as there will be few cases where an employee remains in employment for such a long time after they went off sick without the contract being terminated. This was an unusual case in that the Claimant had both PHI and was indeed retained after the expiry of the PHI in this case.