Automatic transfer

The Employment Appeal Tribunal (EAT) held in NHS Direct NHS Trust v Gunn that the transfer of an employee’s contract under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) cannot be regarded as an application for employment, as contracts transfer over automatically under TUPE to the new employer.

Basic facts

Ms Gunn, who suffered from rheumatoid arthritis and was therefore disabled, worked 8.5 hours per week for Shropshire Doctors Cooperative Ltd. In late 2012, it was decided that the 111 service she worked for would transfer under TUPE to NHS Direct. She then received a letter in November 2012 from NHS Direct telling her that all staff had to work at least 15 hours per week. She offered to work 10 hours, but this was rejected.

As a result, she objected to her contract being transferred and Shropshire Doctors found her an alternative post. She then claimed in April 2013 that NHS Direct had failed to meet their duty under the Equality Act 2010 to make a reasonable adjustment. Since this led directly to her being unable to take up employment and training opportunities with NHS Direct unlike non-disabled employees, she claimed discrimination on the grounds of disability.

NHS Direct argued that her claim should be struck out on the ground that she was not their employee nor had she ever been an applicant for a job with them

Relevant law

Section 39(1)(b) of the Equality Act states that employers must not discriminate in respect of the terms on which they offer a person employment, but there is little definition as to what amounts to an “applicant” who may rely on this right.

Where an individual objects to a TUPE transfer, the employment will not transfer and the individual’s contract will normally terminate, unless an alternative role is accepted with the transferor. Whether or not a ‘redundancy’ situation arises depends on the facts of the case against the statutory test.

Tribunal decision

The tribunal found in favour of Ms Gunn. It held that by virtue of offering her a contract for 15 hours a week, NHS Direct had made an “offer of employment” as Ms Gunn’s request to work 10 hours per week (instead of the 15 hours proposed) was equivalent to an application for employment within section 39.

The employer appealed, arguing that Ms Gunn was never their employee and the automatic transfer principle under TUPE did not involve an “offer of employment”, so Ms Gunn could not be regarded as an “applicant” for section 39.

EAT decision

The EAT dismissed the employer’s appeal and held that, as an employee who was about to be transferred under TUPE, Ms Gunn could not be regarded as an applicant for employment she already enjoyed. Instead her contract would automatically have been transferred to NHS Direct, exactly as it was, had she not chosen to object.

This would normally have ended Ms Gunn’s claims against NHS Direct. However, the EAT noticed an e-mail dated January 2013 in the bundle of documents, in which NHS Direct had informed Ms Gunn that, as it would not be operating from her place of work, she might be at risk of redundancy and offered her “suitable alternative employment” of 15 hours per week at a different site. This suggested that Ms Gunn was made an “offer of employment” under a fresh contract.

The parties were given the opportunity to offer submissions on this point which had not been considered by the tribunal. The EAT found that Ms Gunn was an applicant under section 39 (albeit for different reasons from the tribunal), as the “offer” made to her by NHS Direct was exactly what it purported to be. This was enough for Ms Gunn’s claims about an alleged breach of the duty to make reasonable adjustments to proceed to be decided on its merits.