Employment e-Brief: Employee on long term sick did not transfer under TUPE

Thursday 3rd September 2015

In the case of BT Managed Services Ltd v (1) Mr Edwards and (2) Ericsson Ltd, the Employment Appeal Tribunal had to consider whether Mr Edwards transferred under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

Mr Edwards was employed by BT Managed Services Ltd as a Field Operations Engineer. He was part of a team which provided mobile phone network maintenance under a contract (DNO contract). He had been off sick since 2006 with various ailments, including a cardiac condition which prevented him from working.

The DNO contract was transferred following a tender process to Ericsson Ltd.  This amounted to a service provision change under TUPE and so the team transferred from BT Managed Services Ltd to Ericsson Ltd in June 2013.  Under TUPE, those employees who were permanently assigned to the DNO contract transferred. The question arose as to whether Mr Edwards, who was on long-term sick, was assigned to the contract, and therefore whether he transferred.

The Employment Appeal Tribunal agreed with the Tribunal that Mr Edwards did not transfer under TUPE.

However, before you start thinking that long-term sick employees do not transfer under TUPE, you should note that this judgment should be viewed with extreme caution as it is very fact-specific.  There had been several attempts to find Mr Edwards less strenuous work and he was therefore regarded as permanently incapacitated without any prospect of him returning to work.  This permanent incapacity was key to the decision.

Why was he still in employment, you may ask? Why had he not been dismissed for capability/ill health reasons? The decision was made to allow him to remain as an employee so that he could continue to benefit from payments under a permanent health insurance scheme.  Even when the payments under the scheme ceased, BT Managed Services Ltd had continued to make discretionary sick pay payments to him.

The Tribunal held that Mr Edwards had ceased to be assigned to the DNO contract in 2010 when the decision was made to keep him permanently absent but that he could remain an employee in order to be able to continue to receive PHI payments.  The Tribunal held that whilst there was still a link to the team, this link was only for administrative purposes.  As he was not assigned to the DNO contract, he did not transfer under TUPE.

The Employment Appeal Tribunal agreed and held that something more than a mere administrative or historical connection is required. There must be some level of participation or, in the case of temporary absence, an expectation of future participation in carrying out the relevant activities of the group.

To discuss this e-brief in more detail, please contact a member of the Employment team.