Does TUPE apply in the transfer of commissioning responsibilities?

In Bicknell v NHS Nottingham and Nottingham Integrated Care Board, the Court of Appeal considered whether the transfer of commissioning responsibilities between NHS bodies triggered the Transfer of Undertakings (Protection of Employment) Regulations 2006 SI 2006/246 (TUPE).

The legal bit 

TUPE applies where there is:

1. a transfer of an undertaking, business or part of an undertaking or business situated immediately before the transfer in the United Kingdom to another person where there is a transfer of an economic entity which retains its identity
2. “economic entity”  in this context means an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary
3. the Regulations apply to – (a) public and private undertakings engaged in economic activities whether or not they are operating for gain.

Therefore, there is a TUPE transfer if there is a transfer of an undertaking  (or a service provision change)  and the activity transferred constitutes an economic activity involving an organised grouping of resources pursuing an economic objective. 

However, regulation 3(5) TUPE contains an exception “An administrative reorganisation of public administrative authorities or the transfer of administrative functions between public administrative authorities is not a relevant transfer”.

The facts

Dr Bicknell, was employed as a GP Clinical Lead by the Nottingham City Clinical Commissioning Group (NC CCG). CCGs were statutory bodies with responsibility for the commissioning of healthcare services for the public within particular geographical areas. They had to assess local needs and decide priorities and plans, and then buy services from providers such as hospitals or clinics. 

In 2020, a number of CCGs in Nottinghamshire, including NC CCG, merged as part of a reorganisation into Nottingham and Nottinghamshire CCG (NN CCG). As a result of this merger Dr Bicknell was made redundant and he brought a number of claims in an employment tribunal alleging that the transfer of his employment to NN CCG amounted to a TUPE transfer.

The Employment Tribunal decision (ET)

The ET found that there was no transfer of an economic entity for the purposes of TUPE. It held that buying (procuring) or commissioning goods or services did not constitute an economic activity. The ET also held that NC CCG’s principal work was to commission healthcare services from providers to be delivered by those providers to the public, and therefore there was no transfer of economic activity. 

The Employment Appeal Tribunal (EAT)

The EAT agreed with the ET and Dr Bicknell appealed to the Court of Appeal.

The Court of Appeal (CoA)

The Court of Appeal dismissed the appeal, and agreed with the ET and EAT, confirming that the tribunal had correctly construed the term ‘economic activity’. The Court of Appeal rejected the argument that a court or tribunal can or should take a different approach to deciding whether an entity is engaged in economic activity depending on whether the court or tribunal is deciding an employment or a competition dispute. 

Comment

The decision has reaffirmed what can and cannot amount to a TUPE transfer and has specifically confirmed that moving commissioning responsibilities will not necessarily amount to a TUPE transfer.

However, where NHS bodies are providing services and not purely commissioning services then TUPE may apply.