When TUPE does not apply

When a business is transferred from one owner to another, the rights of employees are protected by the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).

This means the employees of the previous owner become employees of the new owner on the same terms and conditions.

But what happens when the services provided by the new owners are different to those supplied by the original owners?

The issue arose in a case involving Nottinghamshire Healthcare NHS Trust. It closed one of its care homes and the residents were then moved to homes of their own. Responsibility for their care was then transferred to two independent providers.

Some of the care workers were offered jobs with the new providers. The Trust and the staff involved believed that TUPE applied, but the new providers disagreed.

The case reached the Employment Appeal Tribunal which held that TUPE does not apply if the services are not essentially the same under the new provider as they were under the former provider.

In this case, the services were clearly different because the former residents of the care home were now living in their own homes and were being helped to live more independent lives.

TUPE was also not applicable for a second reason. The care home was no longer operational and so there was no longer a single, economic entity being transferred to which TUPE could apply.

Please contact us if you would like more information about TUPE and the issues raised in this article.