Tees Esk & Wear Valleys NHS Foundation Trust v Harland

For a service provision change under regulation 3(3)(a)(i) of the Transfer of Undertakings (Protection of Employment) Regulations 2006, the question is whether, immediately before the change, an organised grouping of employees had as its principal purpose carrying out the relevant activities for the client.

The employer’s intention and the work actually performed may both be relevant. Neither is necessarily determinative. The principal purpose need not be the sole purpose, but must be the dominant or first-purpose activity. An employment tribunal may find that the purpose of an established grouping has changed over time.

Employees of Tees Esk & Wear Valleys NHS Foundation Trust worked in a team originally organised to provide care for CE. As CE’s care needs reduced, the team continued to exist but its members increasingly cared for other service users.

Danshell Healthcare Ltd later took over the care contract. The Employment Tribunal found that an organised grouping existed and that the claimants were assigned to it, but concluded that its principal purpose immediately before the transfer was caring for other service users. It therefore found no service provision change under the Transfer of Undertakings (Protection of Employment) Regulations 2006. It also declared that the claimants had always remained employed by the Trust. The appeal concerned the proper approach to principal purpose and the scope of that employment declaration.

1. Principal purpose. The appeal against the finding that there was no service provision change was dismissed. Regulation 3(3)(a)(i) required the Employment Tribunal to determine the principal purpose of the organised grouping immediately before the alleged service provision change.
2. The four-stage approach in Rynda (UK) Ltd v Rhijnsburger required identification of the service, the activities performed to provide it, the employees ordinarily carrying out those activities, and whether they were organised into a grouping for the principal purpose of carrying them out.
3. The purpose of a grouping may change over time. The employer’s intention may assist in identifying the purpose, particularly whether a grouping was deliberately organised, but regulation 3(3)(a)(i) asks what the grouping’s principal purpose was, not merely what the transferor intended. The actual activities performed may therefore be relevant, although they cannot alone determine purpose. Temporary cessation of the relevant activities does not necessarily defeat the condition.
4. The Tribunal was entitled to find that the team had originally been organised to care for CE but that, immediately before the proposed transfer, its dominant purpose had become caring for other service users. The fact that care for CE remained a subsidiary purpose did not prevent that conclusion. The Tribunal’s comparison between the resources maintained and CE’s actual needs was evidence relevant to its factual assessment, rather than an additional statutory test.
5. Employment declaration. The appeal was allowed in part. The declaration that the claimants had at all times been employed by the Trust went beyond the issues identified for determination at the preliminary hearing. The parties had not addressed that issue by evidence or submissions. The declaration was set aside, and the identity of the claimants’ employer remained to be determined.

• Employment Appeal Tribunal: dismissed the appeal on principal purpose and allowed the appeal concerning the declaration of employment, setting that declaration aside.
• Employment Tribunal: found no service provision change and declared that the claimants had always been employed by Tees Esk & Wear Valleys NHS Foundation Trust.