Jason Elliott was called to the Bar of Northern Ireland in 2013 and is the Associate Head of School of Law at Ulster University. As a practising barrister, he has developed a largely civil practice representing individuals, companies and public bodies in litigation. This covers a wide range of areas including personal injuries, wills and employment law. In terms of employment law, he has represented both applicants and respondents in the Industrial Tribunal. At Ulster University, Jason lectures extensively on the civil areas of practise such as Equity and Trusts and delivers employment law lectures for both undergraduate and postgraduate students.
No transfer of undertaking under TUPE where the undertaking did not provide ‘economic activity’.
There was a reorganisation of six NHS clinical commissioning groups. The claimant worked for one of these it had responsibility for commissioning healthcare services for different areas. When the six merged, the claimant was given notice of dismissal. This took place before December 2020 and the position was governed by EU Law.
The claimant brought a claim for unfair dismissal citing that that the merger gave rise to a business transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006.
The Tribunal, at first instance, held that the commissioning of services was not in itself an economic activity as required under Regulation 3(2) of the 2006 Regs. It would only be such if the individual commissioning the services was also providing those services on the market. As they only commissioned and did not provide the healthcare services it was not an ‘economic activity’. This decision as upheld by the EAT and cited the FENIN case from the European Court of Justice when it had been held that the commissioner of goods and services also had to provide them for it to constitute economic activity. The claimants appealed to the Court of Appeal arguing that the commissioning which was connected to a market meant it was economic activity.
The Court of Appeal dismissed the appeal. The claimants submitted that there was a wider meaning to economic activity in TUPE than there was in EU Law where it came from the FENIN case. The Court of Appeal held that the language of the relevant provisions were a reflection of the EU Directive and had to be interpreted in accordance with the relevant case law.
This decision provides some clarity on what is meant by economic activity in relation to a transfer of undertaking. It is clear that where it is only the commissioning of services it will not constitute economic activity unless the undertaking also performs those services as well. Despite the argument that there should be a wider definition away from the EU position this was not accepted by the Court of Appeal who recognised that the Regulations had been derived from the Directive and therefore the case law flowing from the Directive should be considered and followed.
You can read the case in full here.
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