The Employment Rights Act (ERA) states that tribunals can only make an order for re-engagement in relation to … “the employer, or by the successor of the employer”. In Greater Glasgow Health Board v Neilson, the Employment Appeal Tribunal (EAT) held that these provisions only apply in very limited circumstances following a transfer in which TUPE is engaged. 

Basic facts

Dr Neilson worked as a GP in a partnership which entered into a contract with the Greater Glasgow Health Board between 2005 and 2017 to provide local health care services.

When the partnership was dissolved in March 2017, the board took over the running of the practice as well as the employment contracts of all its staff under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). As Dr Neilson was an independent contractor, he was not transferred over. Instead, he was offered a fixed term contract until another GP practice could take over.

Once the health board had made those arrangements, it gave Dr Neilson notice of termination of his fixed term contract. He claimed that his contract had been terminated by reason of the TUPE transfer and that his dismissal was therefore unfair.

The board accepted that Dr Neilson had been dismissed by reason of the TUPE transfer but argued firstly that he had not been “assigned” to the new partnership under regulation 2(1) of TUPE because of the temporary nature of his contract.

Secondly, it argued that the new GP partnership was not a “successor of the employer” in terms of sections 115(1), 116(3)(b) and 235 of the Employment Rights Act 1996 (ERA). 

Relevant law

Regulation 2(1) TUPE states that “assigned” means “assigned other than on a temporary basis”.

Regulation 4(1) states that the contract of any employee affected by “a relevant transfer” transfers over to the new owner.

Section 115(1) ERA states that tribunals can only make an order for re-engagement in relation to … “the employer, or by the successor of the employer”.

Section 116(3)(b) ERA states that, when coming to their decision, tribunals have to take into account “whether it is practicable for the employer (or a successor …) to comply with an order for re-engagement”.

Section 235 ERA states that “successor” is “a person who in consequence of a change occurring…in the ownership of the undertaking…has become the owner…”

Tribunal decision

The tribunal held that, as Dr Neilson’s fixed term contract with the board was not a temporary assignment, he had been “assigned” to the organised grouping which transferred to the new partnership. As it was a “successor of the employer”, the tribunal ordered the board to re-engage Dr Neilson.

The board appealed on the ground that the tribunal had failed to consider whether or not it would be reasonably practicable to comply with the order. 

EAT decision

Upholding the appeal, the EAT ruled that the tribunal was required under section 116(3)(b) ERA to consider whether or not it was practical for the board to comply with the order for re-engagement before going ahead and making the order, something it had failed to do.

It had also failed to apply Regulation 4 of TUPE correctly in determining which party bore liability for an automatically unfair dismissal. By virtue of deciding that Dr Neilson had been assigned to the new partnership, it had become liable as the transferee as opposed to the board.

It had also misdirected itself as to the “successor employer” provisions of the ERA which apply in very limited circumstances following a TUPE transfer and were not relevant in this case.

It remitted the matter to a new tribunal for a full re-hearing.