Directors not protected by TUPE

19 Sep 2012

In Edinburgh Home-Link Partnership & others v The City of Edinburgh Council & Others the Employment Appeal Tribunal (EAT) upheld a decision that the Directors of a charity did not transfer when their charity’s services were taken in house by the council.

Edinburgh Home-Link Partnership provided outreach services to vulnerable people.  It operated under agreements with Edinburgh City Council. When the council took the services in house, TUPE applied. The question was whether the two Directors of the charity transferred with their staff; in the language of TUPE, were they part of an organised grouping of employees whose principle purpose was carrying out relevant activities for the council?

Having heard the facts the ET decided the two Directors had strategic roles within the charity. They were concerned with running the organisation and maintaining its ability to function. While these were important roles the Directors were not sufficiently involved in the day to day delivery of services to be regarded as carrying out the provision of those services.  Therefore they fell outside the category of workers affected by the transfer and were not covered by TUPE.

The Directors appealed. The EAT agreed with the ET and expressly rejected the notion that TUPE must apply to anyone who is linked to the activity affected by the transfer. The correct test is whether the Directors were assigned to a group which had, as its principle purpose, the carrying out of the activities which the charity had contracted to provide.  In this case the Directors failed the test because the substance of their roles was for the benefit of their organisation not the activities undertaken for the Council.

Our view:

This decision is a timely reminder of the care required whenever TUPE raises its head.  It is too easy to assume that people who work in a business subject to a qualifying transfer must necessarily transfer with it. One has to consider what they actually do and how their work relates to the core service or economic entity which passes on the transfer. The EAT’s decision is consistent with BIS’ guidance that “organised grouping” refers to employees who are “essentially dedicated” to the activities which transfer.