The recent Employment Appeal Tribunal (EAT) case, Carewatch Care Services Ltd v Henry & Ors heralds good news for any service providers who regularly grapple with the infamous Transfer of Undertakings Regulations 2006 (TUPE).
In this case the EAT held that:
The relevant activity carried out by an outgoing service provider was so fragmented that it could not be said to have transferred to any particular subsequent service provider.
Also the employment tribunal judge was wrong to conclude that the activities carried out pre-transfer were performed by an organised grouping of employees which has as its principal purpose the carrying out of the activities concerned on behalf of the client.
The tribunal judge was also wrong to conclude that each claimant was assigned to an organised group which could transfer, and
The reasoning provided in the judgement in relation to fragmentation, organised group and assignment was defective.
So what’s the story behind this ruling?
In June 2016 Sevacare was contracted to deliver 168 care packages to service users across the borough. The work was split into four regional zones and carers from its bank of zero hours workers were assigned to deliver care at appointed times to service users usually on a permanent basis.
By organising its contractual obligations in this manner Sevacare were able to ensure continuity of care, efficiency and a trusted service, which was important for wellbeing of the service users. On occasions where the permanently assigned care worker was unavailable because of annual leave or ill health absence an alternative carer would be sent to the service user. In order to minimise the travelling time between appointments Sevacare would usually only rota the carers to work within one dedicated zone.
Sevacare serves notice to end the contract
In July 2016 Sevacare served notice on Haringey Council that it intended to withdraw its adult home care services. As the Council had a statutory obligation to continue to provide services to the service users it contacted four major providers, (each of whom subsequently became named Respondent’s in the tribunal claim) and advised that as Sevacare had withdrawn its services that they would be allocated the care packages which they previously delivered. The Council advised that with the exception of a few small packages of care (which were allocated to other providers) the four main providers would be allocated the bulk of the 168 care packages based on capacity and post codes. This was a departure from the regional zone system used by Sevacare.
The source of the complaint
The way in which the Council proposed to split the work created confusion for the carers whose work was split between one or more provider and it became unclear as to who they should transfer to. Sevacare advised the new care providers that any care worker whose allocated hours were 50% or more within the postcode allotted to the service provider should be assigned to that service provider. The service providers did not accept this argument and argued that a TUPE service provision transfer of the care workers had not taken place because the activity of providing home care packages was so fragmented between the providers that it could not be said that the relevant activity continued to be carried out by any one of subsequent care providers.
What happened at employment tribunal?
The employment tribunal ruled in favour of the care workers and held that when Sevacare ended its contract with the Council the care services provided by Sevacare TUPE transferred to the new care providers.
What did the Employment Appeal tribunal say?
The Employment Appeal Tribunal (EAT) held that overall the employment tribunal’s reasoning of the case was in deed defective. The EAT noted that Sevacare’s work was organised by regional zones on whereas the Council funded work was split on the basis of both capacity of the new service providers and postcodes. On this basis it was clear that post-transfer the original relevant activities was being carried out in a fundamentally different way after the transfer.
The EAT also held that, “...there is no evidence that one contractor took on the majority of the work; and in relation to a number of employees it is difficult to establish where the employment should transfer given that various service users went to different contractors”.
Further, in its judgement it stated that there was also no deliberate organisation of the care workers by Sevacare for the purpose of carrying out the council work and so it could not be said they were assigned to the Councils work. For assignment of the contract to occur there must be an organised grouping of employees that existed before the change.
In view of the above the employment appeal tribunal sent the case back to a fresh employment tribunal for a full hearing of the facts.