Employee TUPE Transferred Despite Instruction to Remove Him From Contract

A client’s instruction to remove an employee from a contract did not have the effect of reassigning the employee away from the organised grouping of employees. The employee’s employment therefore transferred to the new service provider.

In Jakowlew v Nestor Primecare Services Ltd (t/a Saga Care), Ms Jakowlew was employed by Saga. She worked principally on a contract with the London Borough of Enfield. The contract was due to expire, after which the services would be provided by Westminster Homecare Limited. 

Ms Jakowlew was suspended pending disciplinary proceedings as a result of difficulties in the relationship with her manager. Enfield instructed Saga to remove her from the group of employees providing the service. They were allowed to do this under the terms of their contract with Saga. Saga objected to the instruction and took no steps to remove her. 

Saga issued Ms Jakowlew with a final written warning on the day before the contract with Enfield expired. Saga also told her that her employment would transfer to Westminster under TUPE. There was confusion between the parties as to whether her employment had transferred. Saga continued to pay her and eventually made her redundant. She claimed unfair dismissal against Saga and Westminster.

The employment tribunal ruled that Ms Jakowlew’s employment had not transferred. The instruction to remove her from the provision of the service meant that she was not employed in the organised grouping of employees at the time the contract transferred. 

The Employment Appeal Tribunal disagreed. The instruction to remove Ms Jakowlew did not have the effect of removing her from the organised grouping of employees that transferred under TUPE. This would have been the case if Saga had complied with the instruction, but the instruction by itself was not sufficient. 

Although neither party argued that the effect of the disciplinary suspension was to remove the employee from the organised grouping of employees that transferred, the EAT expressed its view that this was not the case. A suspension should be treated no differently to holiday or sickness absence. At the end of any period of suspension the employee would return to the group in which they had previously worked (unless dismissed). It could not therefore be said that suspension amounted to reassignment.

A client’s instruction to remove an employee from the provision of services under a contract will only be effective to remove the employee from the group of employees that transfer if that instruction is acted on. Otherwise the employee will remain assigned and will transfer to the new service provider. This enables a service provider to get rid of a problem employee. 

Where a business is transferred, it is common practice for the parties to agree a list of transferring employees and for the transferor to indemnify the transferee for claims by employees not on the list. Although this is less common in outsourcing situations, Enfield could have included a provision in its contract with Saga at the outset requiring the parties to agree a list of transferring employees as part of the exit management arrangements, and providing an indemnity in the event that the list proved not to be accurate.