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An employee on long-term sick leave with little prospect of returning to work did not transfer to a new employer because he was not “assigned” to the team when the team he worked as a part of was transferred to another service provider, the Employment Appeal Tribunal (EAT) has confirmed in BT MANAGED SERVICES LTD v G EDWARDS & ERICSSON LTD.

“Mere administrative connection to that grouping is insufficient to constitute an employee as being assigned to the grouping in the absence of some participation in the grouping’s economic activity.”

At the time of the transfer the employee had not worked for over five years and unsuccessful attempts were made to provide him with alternative, less strenuous, work.  He was regarded from this time as permanently incapacitated. leading to the employment tribunal being told there was “no prospect of his ever returning to work”. However, he had remained nominally an employee of the firms assigned to the same unit, so that he could continue to take advantage of a permanent health insurance (PHI) scheme. When liability under that scheme expired, Edwards continued to receive payments from BTMS which were treated as an expense of his team.

The Employment Appeal Tribunal held that:

  1. The question whether an employee absent from work at the time of a service provision change was assigned to the relevant grouping was a matter of fact to be determined according to the circumstances of each case.
  2. Although absence from work, even lengthy absence, as at the time of the service provision change would not necessarily mean that an employee was no longer assigned to the grouping, an employee who had no connection with the economic activity of the grouping and would never do so in the future could not be regarded as assigned to that grouping.
  3. There is a clear link between the identification of the relevant organised grouping and the question of who is assigned to that grouping.
  4. As the organised grouping subject to the service provision change is defined by Regulation 3(2) by reference to the economic activities its purpose is to pursue, an employee who plays no part in those activities and will never do so is not assigned to that grouping.  Mere administrative connection to that grouping is insufficient to constitute an employee as being assigned to the grouping in the absence of some participation in the grouping’s economic activity.

Comment

Employment law expert Ed Goodwyn of Pinsent Masons, said that it was a further “maddening” example of the courts’ and tribunals’ approach which again limited the situation when employees would transfer where there was a service provider change (SPC).

“Since the SPC provisions were introduced in 2006, service providers have bid for contracts on the basis that TUPE would usually apply to anybody working on that contract.”  Clearly this is not the view of the judiciary who are eroding the burden.

Five years is a long time to be off sick and technically the employee is only in receipt of payments because of the PHI.

Reference:

Appeal No. UKEAT/0241/14/MC

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