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Transfers within public administration
[ch 12: pages 449-450]An administrative reorganisation of public administrative authorities or the transfer of administrative functions between public administrative authorities is not a relevant transfer under TUPE (regulation 3(5), TUPE). This means that most transfers within central or local government (as opposed to transfers from the public to the private sector and vice versa) are not covered by TUPE. Instead, intra-governmental transfers are covered by the Cabinet Office’s Statement of Practice: Staff transfers in the Public Sector (COSOP). COSOP promises “TUPE-equivalent” treatment for affected employees and is available on the GOV.UK website.
COSOP applies directly to central government departments and agencies and to the NHS. Other public sector organisations are also expected to follow it. COSOP is supported by the Local Government Association which encourages its application by individual local authorities.
The government has powers under section 38 of the Employment Relations Act 1999 to provide TUPE-like protection to other classes of employee falling outside the scope of the Acquired Rights Directive. These have led to the Transfer of Undertakings (Protection of Employment) (Rent Officer Service) Regulations 1999 (SI 1999/2511) and the Transfer of Undertakings (Protection of Employment) (Transfer of OFCOM) Regulations 2003 (SI 2003/2715).
A new case has tested the limits of this exclusion from TUPE protection:
A reorganisation resulted in responsibility for local public health being transferred from a Primary Care Trust (PCT) to a local council. The government assumed that this was a transfer of administrative functions, excluded from TUPE protection by regulation 3(5), TUPE), so it devised its own statutory Staff Transfer Scheme. However, under this scheme, the government time-limited the protection of transferred employees’ terms and conditions to just two years. Two years later, the council sought to cut those terms and conditions, leading to resignations, dismissals, and tribunal claims for TUPE unfair dismissal.
The government argued that TUPE did not apply, on the basis that the public health function was neither an undertaking nor an economic entity. The EAT disagreed. In particular, the EAT pointed out that nearly all the work of the public health team could also be done (and in fact was done) by other non-state bodies in the private sector.
An economic activity for the purpose of TUPE protection, said the EAT, is any activity that consists of offering goods and services in a market, even if they are offered free of charge or not for profit. There can still be a market even if those goods and services are provided to a public body, or by one public body to another (for example, a publicly-funded cleaning and maintenance service provided to state schools). Moreover, activities can be “economic” even if an undertaking is 100% publicly funded, acts in the public interest, or acts to perform its statutory duties. The transfer was protected by TUPE. An appeal has been allowed to the Court of Appeal so this may not be the last word.
Nicholls v Croydon LBC [2018] UKEAT/0033