Beware the dreaded TUPE (Transfer of Undertakings Protection of Employment) Regulations. They have acquired notoriety for being complex, emotive, being difficult to understand and a thorn in the side of negotiators who are transferring services from the company to another and/or outsourcing services. TUPE advice and guidance from lawyers and HR specialists will not come cheap, remembering that their advice may be wrong.
Keeping abreast of developments is a necessity and in this regard the recent judgement in Turning Point Limited V Norfolk County Council [2012] EWHC 2121 (TCC). The issues were wider than merely TUPE, but it is upon this which we will concentrate. It is reported that in the ITT at paragraph 8.5(3) it stated ‘Tenderers should note that staff eligible to transfer may come from more than one existing provider and that current providers include the council itself and other providers from the public sector.
Where staff transfer from the public sector, pension protections in addition to those prescribed under TUPE….. will apply and also staff may retain a right to participate in the relevant pension schemes even if they do not currently do so…..’
So if you were bidding for this work, this paragraph has RISK writ large!
For the bidder, things got worse when the council stated at paragraph 9.5.1 ‘The Council will accept no caveats to proposals or variant bids and no liability for any increased costs as a result of changes to Tenderers’ arrangements or assumptions they may make in the course of, as a result of or following this procurement exercise.’
Turning Point submitted 20 questions seeking clarification and other tenderers submitted a further 70 questions. Within the judgement, there are 9 questions about TUPE. We highlight one question (19)
‘Could we request what the employee and employer contributes are from the LGPS, Friends Provident, Aviva and Legal & General.’
This seems to us a perfectly reasonable question, given the impact on pricing decisions. The Council’s answer was
‘This is not considered to be a clarification question but a request for further information. Further TUPE information should be supplied during transition to the successful Tenderer by the transferee…..’
There is a lot more to read in this case, noting that Turning Point Limited lost the case. There are salutary lessons for bidders in this case. Risk in TUPE decisions can cost the parties great losses – so BEWARE!
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