Transfer of employees

Transfer of employees
Allah v NYC Health and Hosp. Corp., 259 AD2d 409, Appeal dismissed, 93 NY2d 999

Section 45 of the Civil Service Law provides for the continuation of employment for eligible employees of a private entity when a public agency assumes the functions formerly performed by the private organization.

The Allah case concerns a variation of this: the “transfer” employees of a private employer to a public employer when (1) the private employer continues to provide services and (2) the public employer performs some of these functions as well. This was the situation when New York City’s Health and Hospital Corporation [HHC] decided to provide some of the services then being provided by the New York Medical College and Coney Island Medical Group as private entities. In other words, there was no Section 45 take-over of these two organizations.

HHC decided that it needed to transfer some of the College’s and the Group’s personnel to perform these “new” services.

To facilitate this “transfer,” the State Legislature enacted Unconsolidated Laws Section 7390(2)(b) exempting health care personnel formerly employed by the College and the Group transferred to HHC from having to take and pass a competitive examination as a condition of becoming civil service employees with permanent competitive status within the HHC system.

The Appellate Division ruled that this provision did not violate Article V, Section 6 of the State Constitution, which requires civil service appointments to be made according to merit and fitness and, as far as practicable, by competitive examination. The court said that the Legislature had expressly determined that “requiring a competitive examination as a condition of transferring the aforementioned personnel to HHC civil service employment with permanent competitive status would seriously interrupt the continuous provision of health and medical services.”

Another issue, however, concerned the “seniority” of individuals “transferred” to HHC.

Section 45 provides that employees in a “takeover” retain the seniority “as among themselves.” However, insofar as their seniority in the public service for the purposes of layoff and other statutory requirements is concerned, such individuals cannot claim seniority pre-dating the effective date of their permanent appointment in the public service with respect to the seniority of employees in the public service on or before the date of a takeover.

Allah and other individuals claimed that employees who had been transferred to HHC employment from New York Medical College and Coney Island Medical Group pursuant to the Unconsolidated Law had Section 45 seniority rights.

The Appellate Division disagreed, ruling that Section 45 is triggered only upon public acquisition of a private institution. Here, the Court decided, there was no takeover of a private entity but merely a transfer of employees to enable HHC to perform functions that New York Medical College and the Coney Island Medical Group continue to provide subsequent to their transfer. Accordingly, there was no acquisition within the meaning of Section 45 and therefore the statute is not applicable.
NYPPL