In Jakowlew v Nestor Primecare Services Ltd t/a Saga Care and another, the EAT reinforced a strict application of TUPE, ruling that, despite a contractual breach on the part of a transferor to remove an employee from a contract which was to be transferred, the employee in question remained subject to TUPE.
Enfield Council had lawfully requested that Saga Care remove the Claimant from working on its Contract due to the poor conduct of those workers. Saga Care resisted the request and instead conducted an investigation and held a disciplinary hearing which resulted in a written warning to the Claimant. On expiry of the Contract, the services were transferred to Westminster Homecare Ltd. Saga Care unwillingly accepted that the Claimant was removed from the organised grouping of employees assigned to the Contract and made her redundant.
The Claimant then claimed unfair dismissal and argued that her employment was caught by TUPE and had transferred as there was a service provision change and relevant transfer. At first instance, the Claimant failed as it was found that just before the transfer, the instruction by Enfield Council was sufficient to remove the Claimant from the organised grouping of employees which carried out Enfield Council’s Contract.
On appeal, the EAT ruled that, Saga Care had not accepted Enfield Council’s instruction to remove the Claimant. Although Enfield Council had the authority under its Contract to ask Saga Care to remove employees from the services, it did not have the power to enforce the removal of those employees and therefore the Claimant was still assigned to the organised grouping of employees subject to transfer to Westminster Homecare Ltd.
This case indicates that just because a transferor is instructed to remove employee(s) from a contract, this does not mean that those employees then cease to become part of an organised grouping for the purposes of TUPE. The transferor must take further, tangible steps to remove that employee from the group before a transfer comes into effect. Enfield Council should have sought written confirmation from Saga Care that they had implemented their instruction and the employee in question had been reassigned to another service.
This case also highlights the importance of negotiating indemnities in contracts in the event that one party is in breach. Saga Care were clearly in breach of the Contract by refusing to remove the employee from the Contract; however it is unclear what losses Enfield Council would have suffered as a result of this breach given that the Claimant transferred to Westminster Homecare Ltd. Westminster Homecare Ltd could have protected their position by agreeing with Saga Care a list of employees eligible to transfer to them together with an indemnity for all costs incurred if an employee not on the list asserted that they did transfer.
For more information on how to avoid unexpected liabilities arising out of TUPE transfers, please contact a member of the Employment Team.