TUPE

James Fairchild
Member - 254 posts

One would assume so, but as you doubtless know this is a complex area, so you may need to get specialist advice.

Presumably your query stems from, if your client terminates this contract, whether the employees pass back to the client (who would then be responsible for paying redundancy) or remain your employees (for you to re-deploy or pay off as appropriate).... and if so whether this is just the initial two, or all four?

There are a few specialist solicitors who browse this forum, so perhaps one will be along to offer initial advice (and doubtless propose a follow-up meeting with you) shortly.

Martin Brewer - Mills & Reeve
Online advisor - 84 posts

Jeremy, if your 4 staff are an organised team and their principal purpose is to provide services to this client then, if the client takes the service (not the specific roles) in house then all 4 staff automatically transfer under TUPE as this would be a so-called service provision change transfer. Likewise if the contract was to go to another contractor, the staff in these circumstances wou;ld transfer to that new contractor.
It is also possible that the contract forms an 'economic entity' so that if only certain of the specific roles are taken in house that nevertheless forms a transfer of 'part of an undertaking' but more detailed information is needed to give a definitive view.

Valerie Wallace
Member - 5 posts

We have a contract with a cleaning contract, the work is not up to scratch and we have advised them of notice of termination of the contract. They have advised us that under the TUPE regulations that the new cleaning form will need to take the cleaners on. This does not make sense to me . Please could you clarify this

Kevin Brown
Member - 88 posts

Absolute rubbish. If the cleaning company were being taken over then employees' rights to continued employment would be protected under TUPE. If you're talking about termination for breach of contract (i.e. not meeting performance criteria) then you'll be looking to re-tenderon the open market. There's no reason why you shouldn't. What would be the point of getting rid of a bunch of cowboys only to take on F & J .James and B.the Kid plc?
This is not a Transfer Undertaking.

Martin Brewer - Mills & Reeve
Online advisor - 84 posts

With respect to Kevin it's simply not right to say that TUPE won't apply to Valerie's circumstnaces. The question is not 'why are you changing contractor'. It doesn't matter if you are terminating the contract for breach, poor performance or you just fancy a change, the question is, if you replace contractor A with contractor B is this a transfer of an undertaking or a service provision change (within the meaning of TUPE). If it's either one or the other then TUPE will apply.
It is one of the abiding difficulties with TUPE that if you change contractors to get rid of a poor performing group of contractor staff, you end up with the same staff employed by the new contractor. The key is in ensuring that you have a robust contract setting out the performance level you require and then properly managing that contract.

Valerie Wallace
Member - 5 posts

To get rid of the present contractors do we therefore have to just terminate the contract and not take on Contractor B.
I think that TUPE should only refer to business which are taken over by another business, why should you have to be stuck with the same cleaners what seems to be for the rest of your life . This does not make sense to anyone with common sense, why is this.

Martin Brewer - Mills & Reeve
Online advisor - 84 posts

It's simply a function of the way TUPE is drafted and it has been the case for almost 20 years so it really shouldn't come as a surprise to anyone. TUPE is designed to protect employees if the business in which they work transfers. This is what happens when one contractor takes over from another. So the short answer is just about the only way to avoid a TUPE transfer is to not have cleaning done (this is because even if you decide to do it yourself the TUPE transfer will be to you).

Valerie Wallace
Member - 5 posts

If I understand you though, this will only arrise if the business in which they work transfers to another business. We are not taking over their business , these cleaners are contracted to work for a company , just as I am contracted to work for my company. It would be very strange for our customers to finish their contract with us as a company but they would still have to take me on as an employee.

If someone came in and took over the company for which I worked then I would agree that I would need to be given first refusal to work for the new compnay . That is the only way that I can see TUPE works , otherwise it would not make sense

Martin Brewer - Mills & Reeve
Online advisor - 84 posts

Valerie, I am sorry to be dogmatic about this but you have to put out of your head ideas of companies being taken over or the transfer of a 'business' as the only time TUPE applies. TUPE will now also apply to a service provision change. This is becasue TUPE 2006 has added a whole new definition of a transfer on top of the previous 'transfer of an undertaking' definition from TUPE 1981. This means if the company which provides a service to you ceases to provide that service, and is replaced, by you (taking the service i n house) or another contractor, then assuming the outgoing contractor had a group of staff dedicated to that service, those staff WILL transfer under TUPE. It is wholly irrelevent that there's no 'takeover', that there is no contract between outgoing and incoming contractor and indeed that they are in fact in competition. It is irrelevant that there is no transfer of 'a business' in the normally understood way.

Jennifer Caswell
Member - 1 post

Hello Valerie

I completely understand your frustration having been in a similar situation previously. However as Martin has outlined, for TUPE to apply there has to be a transfer of 'undertaking' which in effect means that if you wish to transfer the undertaking of cleaning within your company then the cleaners would be protected and transfer to the new contractor for this service. In essence if your cleaners are not performing then this is down to your company to deal with via performance clauses in your contract with the cleaning contractor - it is the management of the cleaning staff that appears to be the issue here, as you rightly say otherwise you are only transferring the problem from one contractor to another.

Paul Cheesebrough
Member - 1 post

Slightly different scenario. My company has been providing services (outsourced computer-aided design) to a major retailer for 4 years. Following a recent contract tender we have just been advised that we have been unsuccessful. The retailer has mentioned facilitating TUPE and has asked to be made aware of the employees affected. My query stems from the fact that the service we provide is technology based and the new provider could be located hundreds of miles away from the client and also from ourselves. In this scenario the employees would perhaps not be so willing to be 'transferred'. Can anyone advise how TUPE might apply in this case?

Martin Brewer - Mills & Reeve
Online advisor - 84 posts

TUPE applies. TUPE doesn't apply differently depending on the factual matrix, it always operates in the same way-automatic transfer of assigned employees, from transferor to transferee, on the transfer date, entire employment relationship transfers other than pension rights, collective agreement and union recognition transfers if relevant. The process is alo always the same.
In particular, to take your scenario, the application of TUPE, if this is a service provision change, is not dependent upon the new services being provided in the same or a similar way to how they are currently provided (including location, technology, structure etc). I should add for the sake of completeness that if the transfer is a classic 'transfer of an undertaking' then the undertaking must retain its identity after the transfer for TUPE to apply, so in such a situation the details of the services and how thay will be carried out etc. becomes more important.
The real question in your example is how you and the new provider handle the transfer in circumstances where there may be a transfer into a redundancy situation. Take good legal advice as this is a potential minefield.

M Tucker
Member - 4 posts

Sorry, but I go with Kevin. Get rid of your cleaning company and get another one. It is not your fault if the company employs those people purely for you - it may be wise to make sure your next cleaning contract states that the workers are not soley employed on your job. Personally, to say this is TUPE is madness and even if it's true - it needs to be tested. Common sense will prevail - Hopefully !!!!!!

Valerie Wallace
Member - 5 posts

Martin,

I really value your points and your expertise in this area, but the cleaners are not employed solely for our company, they cover many companies ours just being one of the contracts that they clean for , so is this still the case .

Martin Brewer - Mills & Reeve
Online advisor - 84 posts

Valerie, this makes a huge difference. Only 'assigned' staff transfer to the new provider and broadly this means staff who are dedicated to your work.

Valerie Wallace
Member - 5 posts

Thanks you for that I was really losing my mind as I could not understand how a law could be passed so that you had to take continue to take on the staff who were not yours. Thank you

Esther Cairns
Member - 1 post

Hi Valerie and all

Your comments are all very interesting and yes TUPE can be a very frustrating law. However we are all employees (Well most of us at the end of the day) and we may need it at some time in the future!!!

I work for a contract cleaning company and this is the biggest headache I come across when gaining new contracts as like you Valerie most people change contracters due to poor performance and then those that are providing the poor service are protected, however my advice to you would be that like Martin has said previously, in the future it could be beneficial for you to negotiate strict contract terms and ensure that the management stick to it.

Also (I am probably not doing myself any favours here!), if you have a complaint ensure that it is logged and dealt with preferably in writing, my biggest gripe coming from the other angle is that although we complete regular site visits and back our findings up in writing as well as completing monthly customer care telephone calls the management are not on site daily and you are. This way if a complaint is made and the cleaning company need to (and are at all reputable!) they should follow disciplinary procedures where needed without your advice and comments they can not. The worst thing is if a client comes to you and says something has been happening for months and this is the first you have heard about it! After all cleaning/Client contracts should be a partnership and that Takes Two.

Finally when choosing a cleaning contract don't go with the cheapest price as the saying goes 'you get what you pay for' or the biggest reputation!, there are many companies out there and some good ones that really do do what they say.

Sorry for such a lengthy reply, regards

James Fairchild
Member - 254 posts

In Valerie's case, is it relevant to consider whether (in the midsts of time) cleaners were employed by Valeries company, then transferred to the cleaning provider (even if those specific cleaners are now dead and buried).

If the specific staff also clean other offices (or do other business for their employer) away from your site, then that is much the better.

With Paul's situation, then if I were Paul I would snap up the chance to loose these people by TUPE - if you don't get rid of them that way, then YOU will pay their redundancy (unless you have other contracts they can be assigned to). Do get advise however.