Public Sector transfer of employees under the Transfer of Undertakings (Protection of Employment) Regulations 2006

Peninsula Team

March 11 2011

With the recent announcement of the “Big Society” and the Coalition Government’s spending reviews on public services, there appears to be a big shift towards private enterprise and charitable organisations being asked to tender for Public Service contracts. Many of our clients in the Voluntary Sector have been approached about the changes to the way that they will be funded in the future and many are being asked to tender, along with private enterprise, for contracts that would have ordinarily been funded by the local authorities as projects for them to work on within the communities they serve. This proposed vision of change to the way that Public Sector Services are going to be run will impact on jobs in that sector. However, some of those jobs in public services will be saved by the fact that the staff will be protected under TUPE, which means that the organisations, whether voluntary or private, will have an obligation to take those staff from the relevant posts into their employment. Many of our clients have, in the past, undertaken TUPE transfers of employees and understand the implications of the Regulations, including the protection of existing terms and conditions of the employees who transfer. However, not all of our clients understand the complicated implications of Public Service Contracts of Employment and the ongoing costs of those contracts until they had gone through the process of bidding, securing the contract and the employees have been transferred. It is, as this point, too late to mitigate for the often highly enhanced arrangements that Public Service Staff are afforded within their contract. At Peninsula we are experiencing an increased amount of calls from clients that have seen the opportunity and benefits of bidding for such Public Services Contracts, which will afford them regular income that is not likely to present the issues of private contracts, such cash flow issues etc. However, information about the employees’ contracts including enhanced maternity pay, holidays, company sick pay, and redundancy payments have left a sour taste. This is without the added issue of Final Salary Pension Schemes and the impact that age can still have on settlement of redundancy in terms of employer contributions to such schemes. We would advise our clients to call the 24 Hour Advice Service before bidding for a contract with public services so that we can advise of the possible cost implications that you would need to factor into your bids. In the event that funding disappears, or the contract ends, or you need to reduce staffing levels for some other reason, we can advise you on what you need to take in to consideration when budgeting for future financial costs. For more information on this topic, please contact the Advice Service on 0844 892 2772.

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