In Service Provision Change cases, after determining that there is an organised grouping it is necessary to consider under Reg 3(3)(a)(i) whether that grouping had as its ‘principal purpose the carrying out of the activities concerned on behalf of the client’. This case considers the correct approach to this issue.
The case concerned care for a seriously disabled person, CE, provided by the NHS Trust for a period of 10 years. Over time, and very gradually, CE’s condition improved. Before 2011 he had required seven to one care. From 2011 he required four to one care. As a result CE moved to a new facility in 2012 in which there were number of other service users requiring specialist care but housed in separate flats. At that time four to one 24 hour care translated into 10 full time equivalent posts (or 11 employees). CE’s condition continued to improve further, such that by February 2014 he required only one to one care during the day and two to one care for six hours on a Friday. He rarely required care at night. As a result of the improvement in CE’s condition the carers engaged to look after him were required to work flexibly and to look after other service users in the same building. In 2015 there was transfer to DH Ltd who had successfully won the contract for the care of CE. The NHS Trust, prior to the transfer, told DH Ltd there was an organised grouping of 11 employees who’s principal purpose was caring for CE. During consultation it reduced this to 7 employees who had been engaged in 2014 as spending more than 75 per cent of their time in caring for CE.
The ET judgment
The ET held there was a consciously organised grouping. A team had been deliberately put together to look after CE. Further that all 11 employees had been assigned to the organised grouping. On the issue of principal purpose however the ET held that the organised grouping was too large and as a consequence the the principal purpose was no longer the care of CE, rather it had become diluted. The purpose had fallen away and was no longer the dominant purpose of the group but by the date of transfer had become a subsidiary purpose. Had the group gradually reduced as CE’s condition improved then the outcome may have been different but it did not and the principal purpose no longer existed immediately before the transfer. Consequently there was no transfer of any employee.
The EAT judgment
The EAT (HHJ Eady QC) held that the ET was correct to focus on the position in 2015. Reg 3(3)(a)(i) requires an assessment of the position immediately before the transfer. The ET made a clear finding that the principal purpose had changed over time so by the date of the transfer that it was not predominantly the care of CE.
The central issue was whether the ET were entitled to look at the facts on the ground rather than the original intention. HHJ Eady QC held that there was no ‘bright line’ which meant excluding either of these factors. Rather the words of the regulation should be applied. Adopting that approach, it is apparent that it is not simply the carrying out of the activities that means that the existence of the organised grouping meets the relevant condition; the carrying out of those activities has to be the principal purpose of that grouping, whether or not it is in fact carrying them out at any particular time. If the grouping in fact carries out other work, that might well point to its organisation being for a purpose other than the activities relevant to the service provision change. Similarly, if the grouping comprises far too many employees than would be necessary for the activities in question, that might suggest either that not all the staff concerned were in fact assigned to it or that the real purpose behind the organisation of the group was other than the carrying out of the relevant activities for the client. These are possibilities that an ET might properly consider relevant to its assessment, but it would not be sufficient to identify the actual activities being carried out by the organised grouping without determining its principal purpose.
Reg 3(3)(a)(i) does not ask what was the transferor’s intention (although this will be relevant to determining whether or not there is an organised grouping and may suggest its purpose) but what was the principal purpose of the organised grouping of employees. Addressing this question the ET found that, at the relevant time, this was the carrying out of activities other than those which were to be the subject of the service provision change.
The failure to reduce the size of the team caring for CE had the effect that there was no transfer of any member of the team. Had the NHS Trust reduced the team over time as CE’s care needs reduced, then those engaged in his care at the time of transfer would have transferred.
There are two ways to avoid what occurred here. The first (which is likely to more successful than the second) is to reduce the size of the team over time so that it matches the requirements of the service as those requirements change. The second is, when the service is coming up for retender, to consciously reorganise the team so as to reduce it in size.