If the principal purpose of an organised grouping of employees has been diluted at the point of transfer, does the original principal purpose prevail?


Not necessarily, held the EAT in Tees Esk & Wear Valley NHS Trust v (1) Harland; and (2) Danshell Healthcare Ltd. The tribunal should look at the principal purpose of the organised grouping of employees immediately before the service provision change. Consequently, the tribunal may consider the activities actually performed and the intention behind the grouping to determine what the principal purpose is because, as in this case, it may change over time.
Tees Esk & Wear Valleys NHS Trust set up a team of carers to look after an individual under their care. Over time, the individual’s requirements for carers diminished, but the team remained in place, but undertook work caring for the individual and others at the same location. Danshell Healthcare Ltd took over the contract to care for the individual and the NHS Trust alleged that there was a service provision change under section 3(3) of TUPE transferring the entire team of carers assigned to look after the individual to Danshell Healthcare Ltd. Danshell Healthcare Ltd and the employees disagreed that there was a service provision change, but Danshell Healthcare Ltd took on those employees the NHS trust refused to continue to employ. A number of employees brought unfair dismissal claims and the preliminary issue was whether there was a service provision change which transferred the organised grouping of employees to Danshell Healthcare Ltd.
The EAT upheld the tribunal’s decision that although there was a service transfer and there was an organised grouping which had retained its identity, their purpose had changed over time and consequently immediately before the transfer there was no organised grouping of employees whose principal purpose was the carrying out of the services and TUPE did not, therefore, apply.

Justin Costley


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