In the case of Nicholls v London Borough of Croydon and others, the Employment Appeal Tribunal (EAT) held that the Employment Tribunal (ET) had erred in finding that the transfer of public health functions to a local authority was not covered by TUPE.

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), state that an “administrative reorganisation of public administrative authorities or the transfer of administrative functions between public administrative authorities” is not a relevant transfer for TUPE purposes.

In this case, the Claimant’s originally worked in the public health team at Croydon Primary Care Trust (the “Trust”). In April 2013, the Claimant’s employment transferred to the London Borough of Croydon (the “Respondent”).

In 2015, the Respondent attempted to vary the Claimant’s terms and conditions of employment following a dismissal and re-engagement process. Six of the Claimant’s accepted the new terms but four did not. The Claimants issued claims for unfair dismissal under TUPE. They argued that the dismissals were linked to the transfer and were therefore automatically unfair (regulation 7(1) TUPE) and that the changes to their employment contracts were void as the transfer was the reason for the change (regulation 4(4) TUPE).

The ET held that there had not been a transfer of an economic entity under TUPE because the public health team’s functions concerned the exercise of public authority and therefore the transfer was excluded under TUPE (regulation 3(5)).

The Claimant appealed and the appeal was upheld.  The EAT stated that the ET had erred in its decision because it had found as a matter of fact that all, or almost all, of the work done by the public health team could be, and was, offered by private companies and contractors.  This was indicative that an economic activity was being carried out by the public health team. The EAT held that the ET should have explained why there was no economic activity despite such findings. The EAT remitted the case back to a different ET to reconsider this point.

In addition, the EAT held that if there was a relevant transfer, then the employment contracts would be protected against transfer-related changes.

Whilst we await a further ET decision regarding whether the transfer in this particular case is covered by TUPE, the judgment provides useful guidance.

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