SOCIAL - BLOG
18 AUGUST 2019
BLOG FROM LAURA RYAN, LEGAL DIRECTOR UK & IRELAND, ATALIAN SERVEST
THE EFFECT OF TUPE ON FM
IS MULTIFACETED
For almost 40 years businesses have had
to consider the Transfer of Employment
(Protection of Employment)
Regulations (TUPE) when transferring a
relevant undertaking or implementing a
service provision change. In the FM world,
TUPE is an everyday occurrence. Whether this
is dealing with a first-generation outsourcing,
a change of outsourced service provider or an
in-sourcing contract, TUPE can apply.
TUPE exists to protect the
rights of employees and has
introduced three concepts
into UK employment
law. The first concept is
an automatic transfer
principle that ensures
employees transfer on
their existing terms and
conditions with their
continuity of service intact.
This requires the transferee
to step into the shoes of the
transferor in regard to all “rights,
powers, duties and liabilities under or in
connection with” their employment contracts.
The second concept is protection against
dismissal in connection with a TUPE transfer
and the third concept is the obligation to inform
and consult with those employees a ected.
From a legal compliance perspective, both
outgoing and incoming service providers (and
of course customers on a first-generation
outsourcing or an in-sourcing contract) have
obligations to adhere to under TUPE. Failure
to comply with any of those obligations, such
as the obligation to provide employee liability
information (ELI) within specified time periods
and the obligation to inform and consult with
the right persons, could result in legal action
against the o ending party as well as financial
repercussions.
From a commercial perspective, being
able to price an opportunity correctly relies
on thoroughly understanding the cost of
the employee base that is linked to that
opportunity. Therefore, receiving complete
and accurate ELI data for a TUPE transfer is
very important to an incoming provider. From
a practical perspective, managing a workforce
that could potentially be engaged on hundreds
of di erent sets of terms and conditions is
a minefield if the
correct systems and
processes are not in
place to accurately capture
employee data.
For businesses, it is
commercially, financially and reputationally
important to get TUPE right so keep the
following in mind:
• Consider as early as possible whether TUPE
will apply and identify who will transfer.
This is not always clear cut. Businesses must
consider who is wholly or mainly assigned
to the activities changing hands and take
professional advice if necessary
• Allow su icient time to inform and consult
employees
• Review ELI data thoroughly to guarantee
knowledge of the benefits to be provided
post-transfer, and ensure that pricing models
correctly reflect labour costs
• Be aware of restrictions in the contract
between the customer and the current supplier
that prohibit changes to the workforce
during the time leading up to the transfer
date. It’s important to understand the likely
consequences if those restrictions are ignored
• If dealing with a cross-border service, take
jurisdictional advice on the nuances of local
iterations of TUPE as the details di er from
country to country
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...both outgoing and
incoming service providers
(and of course customers on a
fi rst-generation outsourcing or
an in-sourcing contract) have
obligations to adhere to
under TUPE.”
ADVICE & OPINION
Laura Ryan, Legal Director UK
& Ireland, Atalian Servest
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/