Brian Gegg

The Transfer of Undertaking (Protection of Employment) Regulations 2006 (TUPE) apply to the transfer of a business or part of a business to a different employer. For TUPE to apply, there must be a transfer of an economic entity that is carrying out economic activities, although it does not matter whether or not the entity is operating for profit. In the recent case of Bicknell and the British Medical Association v NHS Nottingham and Nottinghamshire Integrated Commissioning Board, the EAT considered the meaning of ‘economic activities’ and ruled that TUPE did not apply to the merger of six NHS Clinical Commissioning Groups (CCGs). 

CCGs are responsible for commissioning healthcare services in defined geographic regions. This includes planning, purchasing, and monitoring healthcare services. Dr Bicknell was employed by a CCG in the Nottinghamshire area, which merged with five other regional CCGs in April 2020 to become the Nottingham and Nottinghamshire CCG. After the merger, Dr Bicknell was made redundant. He brought a claim in the Employment Tribunal, arguing that the merger amounted to a business transfer under TUPE and that his dismissal was therefore automatically unfair. The British Medical Association (BMA) also claimed that there had been a failure to inform and consult under TUPE. 

The Employment Tribunal dismissed both claims, ruling that TUPE did not apply to the merger because the CCGs were not economic entities carrying out economic activities. The Tribunal relied on the 2019 case of Nicholls and another v London Borough of Croydon, where the EAT held that the purchasing and commissioning of goods and services cannot in themselves constitute an economic activity. TUPE would only have applied to Dr Bicknell’s transfer if the CCGs had delivered health services on the market as well as commissioning them. The CCGS provided training to staff, signposted services to patients, and purchased services to be provided by third parties, but the Tribunal concluded that this did not amount to the provision of medical services.

On appeal, the EAT held that the Employment Tribunal had applied the Nicholls case correctly. The EAT expressed some doubt about the Nicholls decision because it was based on an ECJ decision in a competition case rather than an employment law case. However, the only way to challenge Nicholls would be in the Court of Appeal. Dr Bicknell’s case was therefore dismissed.

When assessing whether TUPE applies to a transfer, it is important to consider whether there is an economic entity. This may be particularly complex in public sector mergers and reorganisations. Subject to any appeal, this case confirms that commissioning services is not in itself an economic activity. In order to amount to an economic activity, the commissioner must also provide the goods and services on a market. Other factors are also important in establishing an economic entity for the purposes of TUPE. For example, there must be an organised grouping of resources that is sufficiently structured and autonomous, and the entity must retain its identity after the transfer.