Capita Health Solutions v British Broadcasting Corporation and another EATS/0034/07

transfer of undertakings | automatic transfer | objection to transfer

The Employment Appeal Tribunal (EAT) has held that an employee who resigned after raising a grievance about a transfer, but agreed to work for the new employer for a limited period, had not validly objected to her transfer.

Mrs McLean was an occupational health nurse at the BBC. On 16 February 2006, the BBC announced that it was transferring its occupational health department to Capita Health Solutions with effect from 1 April 2006.

On 1 March 2006, Mrs McLean raised a grievance about the proposed transfer. She felt that her role would change significantly and that her pension benefits would not be as favourable. A grievance hearing took place on 22 March 2006 and the grievance was rejected in a letter dated 27 March 2006.

Mrs McLean resigned on 30 March 2006, but it was agreed that she would be seconded to Capita Health Solutions for a handover period from 1 April 2006 (the date of the transfer) to 12 May 2006 (the date that her employment terminated). Her pay and benefits would continue to be paid by the BBC during this time.

In subsequent tribunal proceedings, a preliminary issue arose as to whether or not there had been a valid objection to the transfer under the Transfer of Undertakings (Protection of Employment) Regulations 1981, regulation 5 (now the Transfer of Undertakings (Protection of Employment) Regulations 2006, regulation 4). The legislation provides that a contract of employment does not transfer where the employee informs the transferor or the transferee that he or she objects to becoming employed by the transferee.

If there had been a valid objection, Mrs McLean's claim was against the BBC because she had not actually transferred to Capita Health Solutions. If there had not been a valid objection, Mrs McLean had transferred and her claim was against Capita Health Solutions. An employment tribunal found that the objection had not been valid and Capita Health Solutions was therefore the correct respondent.

The EAT, although criticising the employment tribunal's reasoning, found that it had come to the correct conclusion. Referring to Celtec Ltd v Astley and others [2005] IRLR 647 ECJ, it said that employees in a transfer are deemed to be handed over on the date on which responsibility for carrying on the business moves, regardless of anything agreed to the contrary between the parties. The also EAT stressed that TUPE legislation does not prescribe the form that an individual employee's objection to a transfer must take. Whether or not the objection is valid depends on the circumstances in each case.

The EAT decided that Mrs McLean's employment did transfer on 1 April 2006. Applying the decision in Celtec, her secondment agreement could not override the automatic transfer. In addition, she was prepared to work for Capita Health Solutions, albeit only for a limited period, and so she could not at the same time insist that she objected to the transfer.

Case transcript of Capita Health Solutions v British Broadcasting Corporation and another (Microsoft Word format, 110K) (on the EAT website)

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