EMPLOYMENT TRIBUNAL: TUPE SERVICE PROVISION CHANGEOVERS

22 July 2011

This case concerned a care home which closed and the residents were re-housed into homes of their own. This issue was regarding the care of the residents, which was transferred to two new independent providers.

Daniel Barnett’s Employment Law Bulletin reports:

The EAT (Bean J) has handed down its decision in Nottinghamshire Healthcare NHS Trust v Hamshaw and others (EAT/0037/11), which is authority for the proposition that there cannot be a relevant transfer under TUPE, either by way of a transfer of an undertaking under reg 3(1)(a), or a service provision change under reg 3(1)(b), where the services provided to a client are not fundamentally or essentially the same as they were before the change of provider.

In this case Nottinghamshire Healthcare NHS Trust ran a care home. This was then closed and residents re-housed into homes of their own. Their care was transferred to two new independent providers. A number of care workers in the former home were offered jobs with the new providers. The Trust considered TUPE applied. The providers said it did not.

The EAT (upholding the employment tribunal decision) held there was no TUPE transfer. There was neither a transfer of an economic entity retaining its identity (reg 3(1)(a)) nor a service provision change (reg 3(1)(b)). Under the new arrangements former residents were to live in their own flat. The care provided was different. The individual care user was to be helped autonomously to undertake domestic tasks and all the paraphernalia of a fully staffed care home was not available. The economic entity had lost its identity. And even the seemingly wider definition of a relevant transfer by way of service provision change could not apply where the activity carried on by the new provider was not "fundamentally" or "essentially" (per Judge Burke QC in Metropolitan Resources Ltd v Churchill Dulwich Ltd [2009] IRLR 700) the same as the service provided before the change.