An employment tribunal has found that an employee absent on long-term sick did not transfer under TUPE when his employer lost a contract to another company.

TUPE (Transfer of Undertakings (Protection of Employees) Regulations) is the set of rules by which employees go with the assets of a company from a seller to a buyer when a company is bought or sold, preventing unscrupulous employers from cherry-picking the best employees and leaving the rest.

Long-term sick employee didn't TUPE transfer 1Mr Edwards was employed by BT Managed Services Limited as a Field Operations Engineer. His team’s work was outsourced to Ericsson, with his team being an organised grouping of employees under TUPE.

The EAT decided that E did not form part of that organised grouping and so he stayed with his employer. He had been absent on long-term sick leave for five years and was regarded as permanently incapacitated. When his PHI scheme payments ran out BT continued to make payments to him, meaning that he stayed “on the books” as an employee.

But because there was no prospect of him returning to work and he did not contribute to the economic activity of the organised grouping, he was not “assigned” to the grouping and did not transfer under TUPE, according to the ET. The EAT has now agreed with that decision.

This is a rare, but interesting situation for employers who deal with TUPE situations, such as care homes and the security and cleaning industries.