The provision of residential nursing and care services for a group of elderly persons transferred from one care provider to another; the ET held that this amounted to both a business transfer (regulation 3(1)(a) TUPE) and a service provision change (regulation 3(1)(b)). It further held that there had been a failure to consult on proposed redundancies, contrary to section 188 TULRCA, on the basis that the proposal related to more than 20 employees - finding that the designation of staff as “bank staff” did not mean they were not employees in this context. The first and second respondents (as designated before the ET) appealed: the second respondent challenged all three findings; the first respondent challenged the finding under TULRCA.

The EAT allowed the appeal on most grounds. The ET had permissibly found that the use of the term “bank staff” did not preclude a finding of a contract of service, and had reached conclusions open to it in respect of the lead claimant in determining that she was an employee, as that term is defined by section 230(1) ERA. In particular, the ET had done sufficient to identify the existence of a contract giving rise to an irreducible minimum of obligation on both sides (Nethermere (St Neots) Ltd v Taverna and Gardiner [1984] IRLR 240 applied). The ET had, however, erred in finding there had been a failure to consult for the purposes of section 188 TULRCA. To the extent it made any finding of a strategic or commercial decision relating to the future employment of the first respondent’s employees (Kelly v Hesley Group Limited [2013] IRLR 514 applied), the ET had found only that this contemplated their continued employment, pursuant to a TUPE transfer, by the second respondent. It had made no finding that there was any proposal that contemplated collective redundancies. The ET had also erred in finding that there had been a business transfer (pursuant to regulation 3(1)(a) TUPE) of the privately funded residents of the care home, and a service provision change (pursuant to regulation 3(1)(b)). Its reasoning did not support the identification of an economic entity divided in this way, and the decision under TUPE could not stand. It could not, however, be said that a finding that there was no transfer was inevitable: that was not the necessary inference from the ET’s findings of fact and this question would need to be remitted for reconsideration.