Principal purpose

Section 3(3) of the TUPE regulations state that immediately before a service provision change (SPC), there has to be an organized grouping of employees whose “principal purpose” is to carry out the client’s activities. In Tees Esk & Wear Velleys NHS Foundation Trust v Harland and ors, the Employment Appeal Tribunal (EAT) held that when assessing the “principal purpose”, tribunals have to focus on the principal purpose of the organised grouping, not the intention of the transferor.

The claimants’ union, Unison, instructed Thompsons to act on its behalf.

Basic facts

Ms Harland and her colleagues worked for the Trust as part of an organised grouping of employees who looked after an individual known only as CE. Over time, CE improved to such an extent that, rather than needing seven people to look after him, he only required one-to-one care. The team that the Trust had put together remained the same, although it had to also look after other service users in the same building.

On 5 January 2015, the contract to provide care for CE was taken over by Danshell Healthcare Ltd. The Trust argued that, as this constituted an SPC under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) the team looking after CE would transfer over to the employment of Danshell. Danshell reluctantly agreed but the employees considered that they were not assigned to the work that was transferring and brought claims that immediately before the service provision change, there was no longer an organised grouping of employees with the “principal purpose” of looking after CE and that their employment had not therefore transferred over to Danshell.

Tribunal decision

The tribunal held that there had been an organised grouping of employees put together by the Trust to provide care to CE. It also found that the grouping had maintained its identity up to 5 January 2015, which was made up of 11 employees, including Ms Harland and her colleagues.

As CE’s care requirements diminished, the employees had done other work apart from looking after CE, and the tribunal held that the “principal purpose” of the grouping had been diluted so that, by 5 January 2015, it was no longer the provision of care to CE.  There was, therefore, no SPC for the purpose of regulation 3(3) of TUPE.  As there was no transfer, Ms Harland and her colleagues remained employed at all times by the Trust.

The Trust appealed arguing that, rather than looking at what the employees were actually doing, the tribunal should have considered the principal purpose as to why the Trust had retained the grouping.

EAT decision

Dismissing the Trust’s appeal, the EAT held that the tribunal had kept in mind that the principal purpose need not be the sole purpose of the grouping. It was satisfied in this case that immediately before the change in service provision, the grouping’s dominant purpose was providing care to other service users in the building where CE also lived.

Contrary to the Trust’s argument, the law does not require the tribunal to consider the transferor’s intention, but rather the principal purpose of the organised grouping of employees.  Addressing this question the tribunal found that, at the relevant time, “this was the carrying out of activities other than those which were to be the subject of the service provision change”. Whilst allowing that the provision of care for CE still informed the organisation of the team, the tribunal was satisfied that it was no longer the principal purpose.