The TUPE regulations [the Transfer of Undertakings (Protection of Employment) Regulations 2006] cover a range of scenarios – from mergers to ‘service provision changes’ – which occur when the work being done by an ‘organised grouping’ of employees (which can be just one person) is moved to another organisation.
A fortune has been spent on legal fees arguing about when moving a piece of work from one provider to another is a “service provision change”, and so is, or is not, covered by TUPE. You can see in the case reports the desperation of legal advisors and HR teams who simply failed to realise early enough that the Regulations applied to their circumstances.
Whilst there have been some useful cases about what happens when the work is entirely dispersed across a wide range of organisations (no TUPE), the majority of contracting-out exercises (and contracting-back-in, and change-of-service-provider exercises) are covered by the TUPE regulations and are likely to remain so for a while.
TUPE is a bit of a melting pot for HR and employment lawyers, since it is also part of the commercial contracting and purchasing (or sales) side of the organisation, and the thinking of those functions does not always incorporate what HR need to do to make the process work.
In simplistic terms, an organisation considers outsourcing when the function/individuals:
- are too expensive to retain in house for the benefit they deliver;
- are isolated experts on specialist subjects for whom the organisation can offer no ongoing professional development or support;
- are not delivering the right performance against budget;
- where an external body has made a policy decision this should be so
Whatever the reason for deciding, the end effect of TUPE is as profound in psychological terms as it is legally.
Think about it this way. Imagine you woke up this morning with a complete stranger beside you, only to find out that the law regarded you as having been married to each other for years. Not only that, everything the other person did with regard to your household legal affairs is something that is binding on you. So if your new (but in law, longstanding) partner ran up a major credit card bill before you met them, you are required to pay the bill. That is how it is for an employer who has just TUPEd in a team.
And how about being the person transferred. Suddenly you are ‘in bed’ with a complete stranger (or worse someone you know well and positively decided never to date, never mind marry). You are being passed around in a crazy wife-swopping party and you didn’t ask to go to the party.
No wonder people go into denial and say – this can’t be happening to me. But TUPE is real, and it does have this effect. You can see why people spend a fortune litigating and saying “this can’t be applicable to me”.