Scope of TUPE in public sector reorganisations clarified

In last month’s lengthy decision about the reorganisation of public health services in south London, the Employment Appeal Tribunal has given important guidance on the scope of the exemption from TUPE for public administrative functions.

In this case, as part of changes to commissioning arrangements under the Health and Social Care Act 2012, the majority of staff in the public health team at Croydon Primary Care Health Trust were transferred to Croydon Council in April 2013.  At first there was no issue about whether the Transfer of Undertakings Regulations (TUPE) applied to the transfer, because equivalent rights were conferred by a staff transfer scheme made under the Act. The issue rose to the service some years later, when the Council wanted to impose changes to terms and conditions which were on the face of it precluded by TUPE. However the transfer scheme only protected transferred staff against such changes for two years.

The tribunal therefore had to decide whether there had been a TUPE transfer in 2013. The Council argued that this had been a transfer of public administrative functions which fell outside TUPE. The employees argued that the Trust’s public health team had been carrying out an economic activity, and that TUPE therefore applied.

The employment tribunal accepted the Council’s argument, but did not explain how this was consistent with its finding that “all or almost of the work done by the public health team can be, and in fact is, offered by non-state actors operating in the same market”.  It therefore remitted the case to a new tribunal.

It follows that we have no final decision on this dispute. However, the EAT has undertaken a particularly thorough review of the case law which will be useful in future cases.  This includes a look at work areas where TUPE may not apply.  These include:

• General and fiscal administration, security and national defence;
• Regulatory functions; and
• Post which contribute to particular tasks of public administration.

It will not be easy for the new tribunal to work out where to draw the line. But it is clear that it will need to take a very careful look at the tasks the public health team were performing at the point their employment was transferred to the Council.