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Assignment and Ignored Instructions

It has long been accepted that the issue of whether an employee is “assigned” to an undertaking or part of an undertaking (and thus is subject to a relevant transfer for the purposes of the TUPE Regulations 2006) is a difficult and multifactorial question the outcome of which can often be difficult to predict.
Nicholas Siddall of Littleton’s employment team analyses the recent decision of the EAT in Jakowlew v Nestor Primecare Services Ltd t/a Saga Care and Anor and assesses why the transferee in that case might have good reason to feel somewhat aggrieved.

The Facts

J was employed as a care worker by SC, working principally on a contract for the London Borough of Enfield (“the Council”). In June 2013, following concerns about J’s conduct the Council wrote to SC instructing it to remove them from work on its contract. This instruction was lawful under the contractual arrangements. However, SC disputed the Council’s right to issue the instruction and did not immediately comply. Instead, it took steps to address the disciplinary issues involving the three employees and issued J with a written warning on 27 June. Meanwhile, SC’s contract with the Council expired and the relevant services transferred to WH Ltd on 1 July. There was some confusion over whether J had transferred with the services under TUPE. Eventually, SC accepted that J had not transferred because of the Council’s unwillingness to have her working on the contract. SC continued paying J until it dismissed her for redundancy in September 2013. J claimed unfair dismissal, arguing that her employment had transferred her under TUPE to WH Ltd.

The issue

The issue was one common to those whom practise in the world of artificial reality which TUPE forces us to inhabit. Despite SC treating J as still having been employed by it (for over two months) was that in fact the case? The Employment Tribunal found that the Claimant was not assigned to the undertaking transferred but J appealed to the EAT on the basis that the lawful contractual instruction issued by the Council to SC was not determinative of the issue of assignment.

The decision

After a review of the authorities the view of the EAT (HHJ Richardson) was that J was correct. He accepted the fact that the Council’s instruction was lawful but noted that at the time SC had disputed the lawfulness of the same – a position not maintained before the EAT. However he concluded that the issue of assignment was one which focussed uniquely on the decisions of the employer and not a third party. He put the matter thus:
“27. In this case Clause 10.5 of Enfield’s contract enabled Enfield to give an instruction to Saga.  It did not, however, authorise Enfield to assign an employee itself.  It was for Saga to decide what action to take.  It could have taken steps immediately to remove the Claimant from the group of workers dealing with the contract.  If so, she would no longer have been assigned to the group because the employer would no longer have required her to work in that group if her absence had not been excused at that time.  This was the position in Robert Sage.  Saga, however, did not take this course.  It protested the instruction and sought to change Enfield’s viewpoint.  In such circumstances, an employer will not necessarily change the assignment of an employee from the group of workers concerned.”

Consequences

This decision is most likely to impact on transferees whom are the client and are taking an out-sourced service back in house. In those circumstances they would be well advised to ensure that no transfer occurs until any instruction that they might give regarding the removal of an employee has been carried out. Additionally they may also wish to consider inserting a clause in any contract (as alluded to by the EAT) which allows them the contractual power to remove employees from a contract as a matter of right. In the absence of such a clause a specific indemnity provision addressing losses flowing from a failure to follow such an instruction may fruitfully be inserted.
Further the decision is a salutary reminder of the counter-intuitive nature of TUPE litigation where both transferor and transferee considered that J was not the subject of a relevant transfer but the EAT has accepted J’s case (first raised over 2 months after the date of the transfer) that he was.
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