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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 46146
Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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TUPE: A client of my consulting company has requested adding

Customer Question

TUPE: A client of my consulting company has requested adding TUPE provisions to the agreement under which we provide staff - we have a 12 month contract under which we provide 10 consultants who work on their premises in the UK and another 20 staff based overseas using an offshore model. All 'staff' are employed by my company. Questions: If the client terminates the contract at the end of 12 months, is there any way that they can use TUPE regulations to force a transfer of our staff to themselves or a different supplier? 2. The proposed terms include a clause saying that the client has to approve any changes to the contractual terms of 'potentially transferring' staff during the final 5 months of the contract. Is this a legal (TUPE) requirement?
Submitted: 9 months ago.
Category: Law
Expert:  Ben Jones replied 9 months ago.

Hello, my name is***** am a qualified lawyer and it is my pleasure to assist you with your question today.

Expert:  Ben Jones replied 9 months ago.

Are these consultants employees or elf employed?

Customer: replied 9 months ago.

All 'staff' are employed by my company.

Expert:  Ben Jones replied 9 months ago.

Whether TUPE applies and how it applies is a matter of law, not a matter of contract. In simple terms, neither you nor the other side chooses when TUPE applies or how it would apply – this is all determined by law. Therefore, if the elements of a TUPE situation have been satisfied, TUPE will automatically apply, whatever you have agreed between yourselves.

When it comes to service provisions, TUPE applies when a service changes providers, for example the service you had provided is taken in house by the end client or they change the service provider and get someone new to continue the provision of that service. So yes, it is entirely possible that if they terminate the service contract with you and get another company to provide the same services instead of you, those staff which were assigned to this service provision will automatically transfer to the new provider. Saying that, the affected employees have the right to opt out of a transfer so if they did not want to move to the new company they can opt out and remain working with you. This is something they have to decide for themselves though, you cannot force them.

As to the changes to the contracts, before the transfer has occurred there is no TUPE protection against changes to their terms so it is possible to have the client’s approval for any such changes. However, once the transfer occurs then the legal protection will kick in and they cannot make changes to their contracts unless allowed by law.

I hope this has answered your query. I would be grateful if you could please take a second to leave a positive rating (3, 4 or 5 stars) as that is an important part of our process and recognises the time I have spent assisting you. If you need me to clarify anything before you go - please get back to me on here and I will assist further as best as I can. Thank you

Customer: replied 9 months ago.

Thank you, ***** ***** to be clear on this. So the client terminates the service contract for our 10 (consulting) employees. We wish to continue to employ these staff, with whom we have contracts of employment, and assign them to other clients, but you are saying that TUPE will automatically apply? I thought it was only if we were making them redundant or similar? How can the consulting industry possibly function if what you say is true?

Expert:  Ben Jones replied 9 months ago.

It is not as simple as that. They have to be assigned to the services that are moving, such as they should almost exclusively be working on the services that are moving. The services that are being taken over by someone else must fundamentally be the same. Also this must not be a task of short duration, such as a one off project - it must be an ongoing service provision. Assuming these criteria are met then yes TUPE can certainly apply automatically but as mentioned the employees can decide to opt out and remain with you if they wanted to

Customer: replied 9 months ago.

OK, so would you say that a 12 month fixed term contract is short term or long term? Also, who does this tie in with a non-solicitation clause, which in this case theoretically protects us for the period of the contract and 12 months thereafter?

Expert:  Ben Jones replied 9 months ago.

A fixed term contract is likely to suggest a short term duration of service provision so it means it may fail the TUPE test.

Happy to answer follow up questions on non-solicitation matters but please leave your rating first for the responses above on the TUPE matter, thanks

Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 46146
Experience: Qualified Solicitor - Please start your question with 'For Ben Jones'
Ben Jones and 2 other Law Specialists are ready to help you
Expert:  Ben Jones replied 9 months ago.

Thanks and what specific queries do you have about the non solicitation?

Customer: replied 9 months ago.

So non-solicitation is supposed to protect us against the client seeking to employ our staff. But it seems like the TUPE regulations allow them to completely circumvent this. The implication of what you have said is that a client could deliberately have us set up a service (with all the recruitment costs etc. that this might incur), run it for a short period (say 12 months...) , terminate the contract and then simply take over the staff with no commercial redress for us. This is a huge risk for us!

Expert:  Ben Jones replied 9 months ago.

The issue with contractual non-solicitation clauses is that the law will also take precedence over contract. So in a genuine TUPE situation a non-solicitation clause preventing the client from poaching your staff is worthless because TUPE is law and will take precedence. What you have described is possible assuming that TUPE applies. Also you can provide separate incentives for the employees to make it attractive for them to opt out of the transfer.

Customer: replied 9 months ago.

Given your last sentence we would have to do this before commencement of the final 5 months of the contract - which may be why the client has asked to include it.

Expert:  Ben Jones replied 9 months ago.

that is only if you are doing it as part of their contract, there is nothing stopping you from doing this separately and outside of their usual contract of employment.

Customer: replied 9 months ago.

Interesting, thank you. Actually their contracts of employment forbid them from joining clients or their affiliates...

Expert:  Ben Jones replied 9 months ago.

yes but remember that if this is as a result of TUPE transfer then the contractual restriction will not be valid anyway

Customer: replied 9 months ago.

OK, thanks.

Expert:  Ben Jones replied 9 months ago.

you are welcome

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