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This question was discussed in the case of BT Managed Services v Edwards where it was held by the Employment Appeal Tribunal (EAT) that an employee on long term sick will not be assigned to the grouping given that their absence is permanent and there is no expectation of a return to work.
Mr Edwards worked for Orange, the IT and communications provider, in its DNO division, which was eventually outsourced to BT. From May 2006, Mr Edwards became ill and was absent on long term sick due to a heart condition and did not return to work after January 2008. Under his employment contract, Mr Edwards was entitled to permanent health insurance (PHI) and, by 2009, even though he had not returned to work, Mr Edwards remained on the books of the Company as an employee in order to receive regular PHI payments by the provider.
In June 2013, the DNO division subsequently transferred from BT to Ericsson. It was accepted there was a TUPE service provision change. However, Ericsson argued that Mr Edwards did not TUPE transfer as he did not contribute to the activity of the team (due to his long term absence) and was therefore not considered to be part of the “organised grouping” providing the services immediately before the transfer. BT argued otherwise and also argued that the liability to pay Mr Edwards transferred to Ericsson.
It was decided by the EAT that, at the time of the transfer, Mr Edwards was no longer assigned to the relevant organised grouping, as an assignment requires more than an employee being on the books for administrative purposes. The EAT further ruled that Mr Edwards had not been part of the assigned group since 2010 when BT decided that Mr Edwards would not be fit to return to work.
My opinion is, although this ruling proves useful for transferees, employers still need to carefully assess those employees on long term sick to determine the reasons for their absence and whether there is any likelihood or expectation of a return to work. Remember, this only applies to employees on long term sick and not those employees whose absence has been temporary.
For more advice contact our Employment team.