Skip to main content
Global HR Lawyers

Service provision changes – determining principal purpose of organised grouping

25 September 2017

The EAT has given guidance on the correct approach to determining the “principal purpose” of an organised grouping of employees within the meaning of the service provision change (“SPC”) rules under TUPE.

Facts of the case

 “CE” was a patient of Tees Esk NHS trust suffering from severe learning difficulties and needed extensive nursing care. He lived in Bankfields Court, a building of flats which hosted service users requiring specialist care. CE’s care initially involved a 27-strong team of qualified and unqualified carers. 

Over time, CE’s care needs reduced as his condition improved. From 2012, his care team reduced to 11 people who worked flexibly, caring for CE and 17 other Bankfields residents as required. From 2014, CE’s condition had improved so that he needed one-to-one care only during the day and rarely any assistance at all during the night, when the staff on duty would care for other service users.

In January 2015, Danshell Healthcare Ltd took over the contract for CE’s care and an issue arose over whether TUPE would operate to transfer any employees from Tees Esk to Danshell. Initially, Tees Esk adopted the position that all 11 employees who had been assigned to care for CE from 2012 would transfer. This was later reduced to the seven staff who had worked with CE for more than 75% of their shifts (including night shifts) in the year prior to June 2014.

The employees involved wanted to stay with the NHS trust and disputed that they would transfer under TUPE. Danshell also challenged Tees Esk’s analysis, arguing that there had not been an organised grouping of employees which had caring for CE as its principal purpose. It contended that CE’s care required no more than 3 FTE employees, not the seven from a team of 11 that Tees Esk had contended.

The Employment Tribunal (“ET”) concluded that:

  • The service was personal care for CE and the activities carried out by the organised grouping were providing nursing assistance to enable him to live as independently as possible.
  • There were 11 employees who ordinarily carried out those activities.
  • Those 11 employees were organised deliberately by Tees Esk into an organised grouping of employees to care for CE, starting in 2005 and maintained until January 2015.

Analysis showed, however, that CE’s needs accounted for around 125 hours out of 375 hours worked by the 11 employees. The ET concluded that by January 2015 the principle purpose of the organised grouping had become diluted and was no longer the care of CE. That was now a subsidiary purpose and the principal purpose of the organised grouping by the time of the transfer had become the general provision of care to service users in Bankfields Court.

Consequently, the ET found that the employees did not transfer to Danshell and had remained employed by Tees Esk.

The EAT’s ruling

Dismissing Tees Esk’s appeal, the EAT concluded:

  • The ET’s findings had been permissible and it should not interfere with them.
  • TUPE does not enquire about the transferor’s intention. This may be relevant to whether there is an organised grouping at all, but it is not relevant when determining its principal purpose.
  • The assessment of the principal purpose should not be on a historical basis, but immediately before the SPC. 
  • In line with the ET’s approach, the grouping’s principal purpose immediately before the SPC was no longer the provision of care for CE. That had become a subsidiary purpose and the principal purpose had become provision of care to service users in Bankfields Court in general.


The EAT’s judgment seems sensible. The actual activities carried out by employees in the organised grouping need to be examined carefully, at the point immediately before the transfer. The case is an interesting example of how a group’s principal purpose can shift over time.

This case would probably have been decided differently had Tees Esk reduced the size of the organised grouping looking after CE’s needs gradually as his care requirements lessened, so that there was still an organised grouping whose principal purpose was focused on his personal care. Instead, Tees Esk retained the size of the organised grouping and filled the employees’ increasing capacity with other duties.

Equally, the case would have been decided differently if the entire service - care of the service users in Bankfields Court generally - had been outsourced to a different provider rather than just the portion of the service relating to CE. In that situation, the service being outsourced and the principal purpose of the organised grouping would have been fundamentally the same.

Tees Esk & Wear Valleys NHS Foundation Trust v Harland and others [2017] IRLR 486 judgment available here

Back To Top