TUPE reform: service change provisions to stay

The Government has decided not to remove the service provision change (SPC) rules in its reform of Transfer of Undertakings (Protection of Employment) Regulations (TUPE). It published its response to the consultation on the proposed reforms earlier this month (September 2013).

The SPC provision can have a negative effect for businesses where a client wishes to change agency or outsourced service provider. The DMA argued on behalf of members in its response to the consultation that the SPC made changing agencies difficult, as the reason a client wants to move service provider is that it has lost confidence in the people at the current service provider working on their account.

If TUPE applies, there is a risk that employees of the old service provider working exclusively on the client’s account will either transfer to the client or to the new service provider. Either way the client could end up with the same people dealing with their affairs.

DMA members will have to continue to ensure the risk that employees may transfer to/from them to the service provider or from the old service provider to the new one is addressed during negotiations and in the outsourcing/insourcing contract.

Whether TUPE applies in the case of a change of service provider or outsourcing work or bringing work back in-house will depend on the specific circumstances and members are advised to seek advice from a specialist employment lawyer in such cases.

Janine Paterson, Solicitor, DMA