In BT Managed Services v Edwards UKEAT/0241/14, the Employment Appeal Tribunal (EAT) considered whether an employee on long-term sick leave transferred under TUPE.

Mr Edwards was employed by BT Managed Services Ltd (BT) in its domestic network outsource (DNO) division. He went on long-term sick leave in 2008 and did not return to work. He initially received permanent health insurance payments but when those payments stopped, BT kept him "on the books" and continued to pay him. In 2013, the DNO division transferred to Ericsson Ltd under TUPE. Ericsson did not accept that Mr Edwards' employment had transferred. The EAT agreed. It confirmed that there must be some level of participation, or an expectation of future participation, in the relevant economic activity. Here, Mr Edwards was permanently unable to return to work and could have no further involvement in the activities performed by the DNO division. He was therefore not assigned to that division and his employment did not transfer. The EAT also considered it key that BT had made a conscious decision to keep Mr Edwards permanently absent so that he could continue to receive payments.

This decision should be treated with caution. Employers should be mindful that it will be a matter of fact in each case as to whether an employee on long-term sick leave transfers under TUPE. Both the outgoing and incoming employers in such cases should also ensure that appropriate indemnity protection is included in the transfer documentation.