Nottinghamshire Healthcare Nhs Trust v Hamshaw & Ors (Transfer of Undertakings : Service Provision Change)

For a TUPE transfer, an economic entity must retain its identity. The fact that the same service users continue to receive care, or that some employees continue providing services, is not decisive. The whole organisation of resources, including premises, equipment, management, staffing and methods of work, must be considered.

For a service provision change, the tribunal should apply the statutory wording directly. It must identify one of the specified changes, confirm the conditions in regulation 3(3), and ask whether the activities carried out after the change are fundamentally or essentially the same as those carried out before it. The question is one of fact and degree. Minor differences in tasks, method or location will not ordinarily prevent a transfer, but a fundamental change in the nature or ethos of the service will.

The Trust operated Hillside House, a residential care home for adults with learning disabilities. The home closed, and its seven residents moved into individual homes under a new supported-living model. Care provision was undertaken by Perthyn and Choice Support, with some former Trust employees offered employment by those organisations.

The Employment Tribunal held that there had been neither a transfer of an economic entity retaining its identity nor a service provision change under the Transfer of Undertakings (Protection of Employment) Regulations 2006. The Trust appealed, arguing that the continuity of residents, care workers and care provision established a relevant transfer.

1. The appeal was dismissed. The Employment Tribunal was entitled to find that neither type of relevant transfer had occurred.

2. For regulation 3(1)(a), the relevant economic entity was not merely the care assistants and residents. It comprised the premises, staff, equipment, resources and organisation associated with Hillside House. The care assistants and residents transferred, but the premises, equipment, resources and organisation did not. The entity therefore did not retain its identity.

3. A change in the manner or location of service delivery does not automatically prevent a transfer. However, it is legitimate to focus on the differences between the old and new arrangements and assess what those differences amount to. The continued provision of care to the same residents was not decisive.

4. The approach in Fairhurst, Ward, Abbotts Ltd v Botes Building Ltd was not confined to cases where the transferred part was itself a separate economic entity. Fragmentation between two providers did not prevent the Tribunal from asking whether the relevant entity retained its identity.

5. For a service provision change under regulation 3(1)(b), the Tribunal should ask whether one of the three statutory situations exists and whether the conditions in regulation 3(3) are satisfied. It should concentrate on the relevant activities and apply the statutory words in a straightforward and commonsense way.

6. The activities after the change need not be identical in every detail. The question is whether they are fundamentally or essentially the same as those performed before the change. This is a question of fact and degree. Here, moving residents from an institutional care home into individual homes, with a materially different emphasis on independence, domestic tasks and sleep-in support, made the services fundamentally different.

7. The Tribunal did not need to decide whether the relevant client was the Secretary of State for Health, the Primary Care Trust or the County Council, because the appeal failed in any event on the activities test.

• Employment Appeal Tribunal: dismissed the Trust’s appeal from the Employment Tribunal’s ruling that there had been no relevant TUPE transfer.
• Employment Tribunal: determined at a pre-hearing review that neither a transfer of an economic entity nor a service provision change had occurred. No citation for that decision is stated in the judgment.