Who transfers?


A difficult question for those caught up in any transfer is working out exactly who transfers and who does not, and what choices, if any, employees and employers have in deciding who goes and who stays. 



Regulation 4 of TUPE says that the only employees who transfer on the transfer date are those who are:



• employed immediately before the transfer (or who were dismissed unlawfully immediately before the transfer because of TUPE); and 



• who are assigned to the organised grouping of employees or resources. 



If there is a dispute, the onus is on the employee to prove that they are assigned to the organised group. 



Employees who “object” to the transfer before the transfer date will not belong to the transferring group. There are significant risks to “objecting” to a transfer (see page 462). 



TUPE does not give a commissioning client the statutory right to dictate who transfers (Jakowlew v Nestor Primecare Services Limited t/a Saga Care [2015] UKEAT/0431/14/BA). However, in practice, service agreements often give a commissioning client the contractual right to demand the removal of a particular employee from the group of workers providing the services, at any time and without giving a reason. A service provider who refused to agree to this kind of request would breach the service agreement and risk losing future business. 



Any employee who is a member of the team providing the services on the transfer date will transfer automatically on that date, even if they are suspended, for example for disciplinary reasons (Jakowlew v Nestor Primecare Services Limited t/a Saga Care [2015] UKEAT/0431/14/BA).



When working out whether an employee transfers to the new business, the focus should be on the link between that employee and the activities carried out under the service contract or part of the business that is transferred. Hard questions are likely where someone’s time is normally divided between two or more different parts of the business and only one part transfers. The EAT has said that tribunals should look at where the employee is assigned to work in reality. 



Relevant factors include:


• how much time is spent on the transferring part of a business;



• the employee’s tasks and duties under their employment contract;



• the work they carry out day to day;



• how the employer allocates costs associated with their employment across different parts of the business; and



• the employee’s position in the organisational framework. For example, a manager with responsibilities spread across the whole business, rather than just the part that transfers, is unlikely to be included in the transferring group (see London Borough of Hillingdon v Gormanley [2014] UKEAT/0169/14/KN).



There is no such thing as a “percentage” test. Even so, the percentage of time someone spends assigned to the group carrying out the activities that transfer is likely to be a relevant factor. Whether someone is assigned to the transferring group is always a question of fact for the tribunal to decide. 



To have a valid business transfer or service provision change, employees must have been assigned to the organised grouping “immediately before” the transfer or the ending of the service contract. The focus should be on the activities being carried out immediately before the transfer or service provision change (Amaryllis Limited v McLeod [2016] UKEAT/0273/15/RN). For example:


There can be a transfer or a service provision change even if operations are temporarily suspended before a sale or contract change (Housing Maintenance Solutions Limited v McAteer [2014] UKEAT/0440/13/LA). In Wood v Caledonian Social Club Limited EAT/0528/09, a bar suspended operations because it lost its alcohol licence, and Wood was dismissed. Even so, when the bar reopened a few weeks later under new management, Wood could bring a claim for automatically unfair dismissal against the new business under TUPE. As always, every case depends on its own facts. For example, a different conclusion was reached in ALNO (UK) Ltd v Turner [2016] UKEAT/0349/15, summarised on page 449).


A temporary lay-off will not prevent employees being an “organised grouping” and transferring when a service contract is finally awarded to the new provider (Inex Home Improvements Limited v Hodgkins & Others [2015] UKEAT/0329/14/JOJ).


In Mustafa v Trek Highways Services Limited [2016] UKEAT/0063/15/BA, a case brought with the support of the Unite union, activities were suspended for three weeks due to a dispute between the main contractor and the sub-contractor, after which activities were taken over by new contractors. The EAT ruled that despite the shutdown during the dispute, the employees who worked on the old contract transferred to the new contractors when work resumed.