Are employees on long-term sick leave assigned to an organised grouping of employees for TUPE purposes?

Are employees on long-term sick leave assigned to an organised grouping of employees for TUPE purposes?


Author: Sarah Lovell

Applies to: England, Wales and Scotland

Not necessarily, says the Employment Appeal Tribunal in the case of BT Managed Services Limited v Edwards v another. If the employee is connected to the organised grouping for administrative purposes only then they are unlikely to be assigned.

This case involved a service provision change under TUPE. Only employees who form part of an organised grouping of employees, assigned to carry out the services that are the subject of the transfer, will move to the new provider.

Mr Edwards was employed by BT Managed Services Limited (BTMS) as a field operations engineer until he developed a heart condition which prevented him from carrying out the work that was required for his role, such as accessing sites, often on foot, and climbing towers. Mr Edwards went on long term sick leave in January 2008 and was in receipt of permanent health insurance (PHI) payments. He remained employed by BTMS in order to continue receiving the PHI payments. Even when the PHI payments ceased he remained on BTMS' books and was in receipt of some payments from them.

In December 2012 the service contract on which Mr Edwards had worked previously was transferred to Eriksson. There was no dispute that TUPE applied and that Mr Edwards' team transferred. The question was whether Mr Edwards was part of the organised grouping of employees at the time of the transfer.

The Employment Tribunal (ET) found, and the Employment Appeal Tribunal (EAT) agreed, that he was not. The EAT gave the following guidance:

  • if an employee is absent from work at the time of the transfer, it will be matter of fact for the ET to determine if they are part of the organised grouping that transfers or not;
  • even lengthy absence will not preclude the employee from being assigned, but there must be some expectation of future participation in carrying out the relevant activities;
  • the ET must identify the organised grouping which transfers and then consider who is assigned to that group; and
  • the organised grouping is defined in the TUPE Regulations by reference to the economic activities that the grouping pursues; an employee who plays no part in those economic activities will not be assigned to the grouping

What does this mean?

It is important to distinguish between employees who are either temporarily or permanently unable to work. It is clear that employees who are only on short term absence, or those who are on longer term absence but have some prospect of returning, will still be considered to be assigned to the organised grouping of employees and will therefore transfer.

This case applies to employees who are both on long term absence and who have no real prospect of returning. For an employee to be in scope for transfer, there has to be some connection to the economic activities carried out by the organised grouping.

While employers should not imagine that this decision will apply frequently in TUPE transfers, it does provide clear guidance on what can be an area of dispute. It is also a significant limitation on the general principle of automatic transfer of employees.


This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.