Mansfield Care Limited v Leah Newman & Ors

A tribunal determining whether there has been a relevant transfer under Transfer of Undertakings (Protection of Employment) Regulations 2006 must identify the alleged economic entity, rather than merely the activities performed, and explain how it retained its identity. A service provision change likewise requires identification of the client, the relevant activities and an organised grouping of employees whose principal purpose was to perform them.

The collective-redundancy consultation duty under section 188 arises only where an employer has taken the operational decision which leads it to contemplate collective redundancies. An intention that employees will continue in employment through a TUPE transfer is not such a proposal.

The label bank staff does not preclude employee status. A continuing arrangement may amount to a contract of service where the facts establish reciprocal minimum obligations, control and regular paid work.

The Edinburgh Employment Tribunal held that the closure of a nursing home and the movement of residents to homes operated by another care provider gave rise both to a business transfer and to a service provision change under Transfer of Undertakings (Protection of Employment) Regulations 2006. It also held that a long-serving nurse described as bank staff was an employee, and that there had been a breach of the collective-redundancy consultation duty under Trade Union and Labour Relations (Consolidation) Act 1992, section 188.

Both providers appealed. The central questions were whether the Tribunal had adequately identified the relevant transfer or transfers, whether any proposal for collective redundancies had been found, and whether the nurse worked under a contract of employment.

1. The appeals were allowed in part. The Employment Tribunal's findings of a relevant transfer under TUPE could not stand and were remitted to the same Tribunal for reconsideration, so far as practicable. The appeals against the section 188 finding were allowed. The appeal against the finding that Ms Smith was an employee was dismissed.

2. The Tribunal permissibly found that the description of Ms Smith as bank staff did not determine her legal status. Its findings established that, after interview and appointment, she performed two regular night shifts each week for about 20 years, was remunerated and controlled by the employer, and had a continuing contract rather than a succession of individual assignments. Those findings were sufficient to establish an irreducible minimum of reciprocal obligation and a contract of service under section 230(1) of the Employment Rights Act 1996. A possible freedom to refuse additional shifts, and a personal sense of loyalty, did not undermine that conclusion.

3. The section 188 conclusion was unsustainable. The statutory duty requires a proposal to dismiss as redundant, arising once the crucial operational decision causes the employer to contemplate collective redundancies. The Tribunal found only an understanding and intention that staff would continue in employment through a TUPE transfer. It made no finding of a proposal for collective redundancy dismissals.

4. The Tribunal had not explained how privately funded residents constituted an economic entity for a business transfer, how that entity retained its identity, or why socially funded residents gave rise to a separate service provision change. For an SPC it had also failed to identify the client, the relevant activities and the requisite organised grouping of employees. Those deficiencies were material, not merely formal shortcomings.

5. Nevertheless, a finding that there was no business transfer was not inevitable. Read holistically, the findings might support an entity comprising an organised and permanently assigned care workforce, the resident customer group and their service contracts. The movement of staff and residents into the transferee's existing structure would not necessarily prevent retention of identity. The issue was remitted under regulation 3(1)(a) only, with further case management for the Tribunal.

• Employment Appeal Tribunal: allowed the appeals concerning TUPE and section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992; dismissed the appeal concerning employee status; remitted the TUPE business-transfer issue.
• Employment Tribunal (Edinburgh): judgment sent to the parties on 17 April 2023. It found a relevant TUPE transfer, found Ms Smith to be an employee, and found a failure to consult under section 188.