Tuesday, November 7, 2017

Supply Chain Groups Need to Anticipate TUPE Problems on Logistics Contracts

Plan Ahead to Safeguard Both Employer and Employee
Shipping News Feature
UK – Many readers will have encountered some of the advantages, and disadvantages, of the employment scheme known as TUPE. The 'Transfer of Undertakings (Protection of Employment) Regulations 2006' to give the beast its full title can, it seems, be a blessing or a curse dependent on one's particular position. The principle of course is simple with the objective to protect a worker from losing employment when a contract he or she is devoted to transfers to another company, and of course the supply chain, including those in the freight and logistics industry, is probably the area most affected.

When a contract is lost to a rival TUPE ensures that the accrued rights of the employees are transferred to the new employer who is obliged to take on those in the work force completely dedicated to the work involved. And therein lies the rub, completely dedicated which, as anyone in the business knows is very often not the case.

One company, Walker Logistics, tells us it has ‘bumped up’ against the TUPE regulations on numerous occasions and believes that, as they stand, the regulations are unsuited to the needs of small and medium-sized employers and are unhelpful to employees too. As an example, Walker’s recently won a fulfilment contract from another 3PL that had been running the account from a site some 80 miles away from their facility. Sales Director William Walker takes up the story:

”Under the terms of TUPE we had to offer the four members of the outgoing contractor’s staff who had been employed on the account the chance to continue their roles with us. All four were modestly paid warehouse workers and it was fairly clear from the outset that the prospect of a 160 mile daily commute to our site would not be attractive to them for a number of reasons, yet the drawn-out TUPE process had to be completed. After two months of dialogue all four objected to the transfer on the grounds of distance and opted for redundancy – which, of course, we would happily have finalised early on in the dialogue but were prevented from doing so by the TUPE rules!

”In our industry the TUPE regulations work well if you are one of the bigger logistics companies and have picked up a new contract that involves remaining at the same site and thanks to TUPE, workers can just switch Hi-Viz jackets and carry on doing what they have always been doing. But for smaller companies there are many aspects of the regulations that simply do not work in the best interests of the outgoing or incoming employer or, indeed, the employee.

”The TUPE regulations are supposed to be a legislative balancing tool that protects employees against the unscrupulous and provides an important safe-guard for workers. But, in practice, there are aspects of the rules that could be said to inhibit and restrict business and competition. Indeed, in a leader column, The Times newspaper went as far as to describe TUPE as ‘one of the chief obstacles to business in Britain’ and as a significant deterrent to competition.”

Many companies of all sizes would doubtless agree that the legislation as it stands can sometimes lengthen a process which could otherwise result in a faster, mutually acceptable deal between the two employers concerned and the affected staff. However overall, when it is clear that the personnel are employed solely on the one contract, the situation is in reality normally quite clear cut. The real problems arise when there is a dispute about what work an employee is contracted for.

When facing a tribunal to decide such matters it is important for both parties that the line between what is expected of both is clearly delineated. This means that, even if there is no hint of trouble ahead, any company employing logistics staff, whether on single or multiple contracts, keeps its personnel’s employment contracts up to date, with the employees duties spelled out with no room for misinterpretation in order to protect both parties from conflicts as yet unforeseen.

Photo: William Walker