Understanding transfer rights under TUPE

Does an employee transferring to a new organisation under TUPE have rights against the transferee under the Equality pre transfer and is the transfer of an employment contract under TUPE an offer of employment? Jeremy Coy and Joanne Payne from Hempsons explain.

NHS Direct v Gunn
Mrs Gunn suffered from arthritis and was disabled for the purposes of the Equality Act 2010. She worked 8.5 hours a week for Shropshire Doctors Cooperative providing the 111 service for the NHS. The 8.5 hours reflected Mrs Gunn’s needs arising from her disability and was agreed as a reasonable adjustment to her terms and conditions.

The service was set to transfer to NHS Direct in 2013 and staff would transfer to NHS Direct under TUPE. NHS Direct were allowed to speak to staff transferring pre transfer, and during this process, NHS Direct informed Mrs Gunn that it required all staff to work a minimum of 15 hours per week. NHS Direct refused Mrs Gunn’s subsequent proposal to work 10 hours a week. In addition, NHS Direct informed staff that the service was to be relocated from Shrewsbury to Dudley.

Mrs Gunn brought a claim against NHS Direct stating that its refusal to continue reasonable adjustments was a discriminatory act against which she was protected as a job applicant; she claimed that NHS Direct had failed to meet its duty to make reasonable adjustments. Mrs Gunn objected to the transfer and her contract did not therefore transfer to NHS Direct under TUPE Regulation 4. Mrs Gunn remained employed by Shropshire Doctors, though in an alternative post.

ET Decision
NHS Direct claimed that since the Claimant was not an employee (as she did not transfer) or a job applicant her claim should be struck out as there was no jurisdiction to hear the claim under the Equality Act 2010. Mrs Gunn argued that The ET dismissed NHS Direct’s application and found that Mrs Gunn was protected as a job applicant as a job offer had been made in relation to her existing contract. NHS Direct appealed against the decision.

EAT Decision
The EAT agreed with the ET’s ultimate decision, but not its reasoning. The EAT found that the automatic transfer of employment under TUPE was not equivalent to the offer of employment and so Mrs Gunn was not in the same position as a job applicant; an employee's contract of employment continues with the transferee exactly as it has with the transferor.

However, in this particular case, when the transferee wrote to Mrs Gunn informing her that the location of her job would be changing following the transfer and offering her suitable alternative employment (using those very words) there was a redundancy situation and the offer of a new job.

Mrs Gunn was deemed a job applicant not because of the TUPE transfer but because of the redundancy situation and offer of suitable alternative employment. When NHS Direct refused her counter offer to work 10 hours a week, it exposed itself to claims of disability discrimination for failing to make reasonable adjustments.

Conclusion
Because Shropshire Doctors permitted NHS Direct to have significant access to its staff pre-transfer, Mrs Gunn decided to object to the transfer, on the basis of the information relayed to her and her subsequent conversations with NHS Direct. Had it not been for the inadvertent offer of suitable alternative employment by NHS Direct, Shropshire Doctors would have been liable for any claim.

This cases highlights dangers to both the sender and receiver organisations in a TUPE situation.

For the sender, it highlights the danger of allowing another organisation to consult with its employees pre transfer. Up until transfer (with the exception of the circumstances in this case) liability will remain with the sender. If the receiver organisation is consulting with employees pre transfer, then it is important that the sender is part of any discussions and it is agreed beforehand what information will be presented to employees, as a means of minimising any risk of a claim against the sender.

For the receiver organisation, this case demonstrates that even before transfer, the receiver may face liability under the Equality Act for those employees who do not transfer. The receiver should be aware that where there is a move to a new site following transfer, this is likely to amount to a redundancy situation and the usual redundancy consultation rules will apply, including the obligation to offer suitable alternative employment. The receiver must carefully consider taking any pre transfer steps or making proposals which go beyond what is required under TUPE.
The message must be that both sender and receiver need to carefully weigh up the risks and benefits before taking pre-transfer steps which go beyond legal requirements.

Jeremy Coy, Solicitor and Joanne Payne, Solicitor, Hempsons