Transfer of Undertakings - Who counts as a “defined group member”?
The issue of which employees are “assigned” to a particular grouping of employees in a change of service provider under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“the TUPE Regulations”) was considered recently by the Employment Appeal Tribunal (EAT) in the case of BT Managed Services Ltd –v- Edwards and another. There, the EAT concluded that a recognised staff member still employed but on long-term sickness absence could not qualify as being part of an organised group providing services.
Mr Edwards worked for Orange as a field engineer in its domestic network outsource division (DNO). From May 2006, Mr Edwards began taking long periods of sickness absence and did not return to work after January 2008 but remained employed and in receipt of permanent health insurance payments. In July 2009, following a tendering process, Orange’s DNO division was transferred to BT Managed Services Limited (BTMS). Mr Edwards’s employment was transferred to BTMS under the TUPE Regulations. When the insurance payments ceased in 2010, BTMS elected to continue to make equivalent payments to Mr Edwards. In 2012, following a further tendering exercise, the DNO division was transferred to Ericsson. BTMS stated that Mr Edwards formed part of the organised grouping of employees transferring as he was part of the division, but Ericsson refused, stating that Mr Edwards’s long term absence prevented him for being assigned to the DNO division.
The Employment Tribunal and the EAT both concluded that Mr Edwards was not part of the organised grouping, and that he not been since 2010 when BTMS had decided that Mr Edwards should be considered as permanently absent.
The EAT said that for an employee to form part of an organised grouping of employees under the TUPE Regulations, there must be some participation, or expectation of future participation, in the group activities being transferred. Accordingly, temporary sick workers were not ruled out of transferring as it was expected that they may be able to return to work. However, for a connection to an organised grouping of employees to be established there must be something more than a paper trail, administrative link, or historical connection to the group. In this instance, Mr Edwards did not have more than a historical connection and therefore, he could not be part of the group transferring.
For more information please contact Martin Sinclair or Nicola Gray or call 01224 632464.