In Bicknell and another v NHS Nottingham and Nottinghamshire Integrated Commissioning Board, the Employment Appeal Tribunal found that the merger of six clinical commissioning groups did not constitute a “relevant transfer” giving rise to protection under TUPE, as the groups were not pursuing an economic activity.
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) provides employees with protection from dismissal because of a change in business ownership. Where there is a “relevant transfer” under TUPE, the continuity of service and terms and conditions of employment of any affected employees will be preserved.
In broad terms, there will be a relevant transfer where there is a transfer of an economic entity which retains its identity or where there is a service provision change. The term “economic entity” is defined under TUPE as an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.
In Bicknell and another v NHS Nottingham and Nottinghamshire Integrated Commissioning Board, Dr Bicknell worked as a GP Clinical Lead for the Nottingham City Clinical Commissioning Group. Clinical Commissioning Groups (“CCGs”) are statutory bodies comprising of local GP practices that commission healthcare services in specific geographic areas. In February 2020, Dr Bicknell was made redundant. In April 2020, six CCGs in the Nottinghamshire area, including the Nottingham City Clinical Commissioning Group, merged to form the Nottingham and Nottinghamshire CCG (“NN CCG”).
Dr Bicknell brought an employment tribunal claim against the NN CCG, arguing that he had been dismissed because there had been a relevant transfer under TUPE and therefore that his dismissal was automatically unfair. Dr Bicknell’s union, the British Medical Association (“BMA”), brought claims in the same proceedings for failure to inform and consult under TUPE. The tribunal found that the CCGs were not economic entities so there had been no relevant transfer for TUPE to apply and dismissed both Dr Bicknell’s and the BMA’s claims. In reaching its decision, the tribunal applied the decision in the Employment Appeal Tribunal (“EAT”) case of Nicholls and ors v Croydon London Borough Council. In this case, it was held that the commissioning of services cannot in itself constitute an economic activity, unless the commissioner also supplies such services on the market. Dr Bicknell appealed the tribunal’s decision, challenging its application of Nicholls and arguing, in the alternative, that the decision reached in Nicholls was manifestly wrong and should be departed from.
The EAT dismissed the appeal. The Judge in Nicholls had relied upon the competition case of FENIN v Commission of the European Communities in coming to their decision. The EAT questioned whether the Judge should have referred to this case in an employment context. Nevertheless, it found that the ECJ had used the same definition of “economic activity” in both competition and employment cases previously and that the Judge’s interpretation of FENIN was fair. The EAT therefore held in Bicknell that the tribunal had correctly applied the Nicholls decision and that this decision was not manifestly wrong so it would be inappropriate for the EAT to depart from it – any error in Nicholls would need to be corrected by the Court of Appeal.
This case will be particularly relevant to those in the public sector and it highlights some uncertainty about the application of TUPE in public sector commissioning. It also acts as a reminder of the scope of the protection afforded to employees under TUPE and of the need for there to be an economic entity pursuing an economic activity for there to be a relevant transfer to which TUPE will apply.
If you are an employer or an employee and you would like advice in relation to TUPE, please get in touch at [email protected].
