The Government has published its response to the TUPE consultation. They intend to change the TUPE regulations with effect from January 2014. No draft regulations have yet been published. This leaves a lot of sales teams and HR teams with a dilemma.
What will the TUPE regulations be when the work we are gaining today comes up for rebid?
There are transfers that were TUPE transfers under the current regulations which will not necessarily be TUPE transfers under the new ones. The clear intention is to reduce the scope of service provision changes that fall within TUPE. The new regulations are not yet written, and when they come into force it will take several years to get case law on what they actually mean.
The extended uncertainty period
I always think of this as the extended uncertainty period – a sort of Heisenberg’s law of legal change. That is nothing new for HR.
Make a plan for uncertainty
We need a plan that integrates with the rest of the business.
Is your sales team going to pitch/cost on the basis that:
- TUPE does not apply to new incoming service contracts
- TUPE may apply
- TUPE will apply
The costs of each of these options are different, and so is the price to the customer (who may want the lowest possible price). Are you going to be working on the basis of ‘costs plus’ where the customer pays if you have to pay off staff? Who pays when the music stops? Can you afford it to be you?
If you are losing contracts that came in as TUPE contracts, are you going to treat this as:
- TUPE does not apply (and make appropriate redundancy payments where necessary)
- TUPE may apply and deal with it on a case by case basis (and schedule the time to decide)
- TUPE will apply and try to persuade the successor organisation to agree
What are your plans for consulting with employees affected by these (non)TUPE transfers?
We will all be writing learned articles once the regulations are published – but there are live contracts due change service provider during the extended uncertainty period.
There are real people with jobs and mortgages to pay who are going to be asking – what happens to me?
Our job is to provide an answer, which means starting to plan for those changes and the uncertainty period.
Review existing contracts
Knowing how the land lies is always useful if you don’t know which way things are going to move. It means you are not trying to process a vast amount of data when the final facts become clear.
Now is a good time to review your contracts with clients or potential clients. What do they say about:
- who pays for what (indemnities and charges)
- and who does what at that point
- where the contractual obligations are tied into to specific TUPE regulations, and where they are free standing
What effect do they have? Do your contracts with clients need changing or updating?
What do your contracts, policies and agreements say?
- Do you have a TUPE policy? Will it need updating?
- Do you have FAQs, or other TUPE related documents, to review
- Do your contracts of employment give you the flexibility you need
Freelancers and sub-contractors
Calling someone self-employed, or paying them on invoice, doesn’t mean they are not an employee. Do the sub contractors and freelancers you use pass the right tests for being in a business themselves? If not, you could find some of them are really employees and covered by the TUPE regulations (more on that in my next blog).
- Do you have written agreements with your freelancers and sub contractors?
- Do they reflect the reality of the arrangement, or are they out of date?
- Does the reality show that you are controlling them?
With the changes due to come into effect in early January 2014, some HR people are going to have a miserable Christmas sorting out end of year TUPE transfers – let’s hope it won’t be you and you will be fully prepared.
Click here to join our free Conversation on TUPE and the service sector.
Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.
Tel: 08452 303050 Fax: 08452 303060
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