Making the right moves

After integrating Boots the Chemists’ in-house design team last summer, Mark Shaw discusses his experience of European Tupe legislation

In-house design teams aren’t always as cost-effective as they seem, and outsourcing to an external consultancy can be an instant way to reduce overheads. It may also be the case that the designers themselves prefer the consultancy environment to the corporate one, and that the design group can introduce processes that can lead to greater efficiencies and better results for the client company.

If you are considering such a move, Tupe legislation – Transfer of Undertakings (Protection of Employment) – might apply to the approach you take and dictate how you organise the transfer. Several key elements (hourly rates, volumes and scope of work, exclusivity arrangements and key performance indicators) must be agreed with your selected consultancy, but you’ll find that Tupe legislation provides the legal framework within which you will both operate.

Tupe is a European law which protects an employee from losing their job when the team they work for moves to another employer (ie if the work goes elsewhere, the employee comes as part of the package). Tupe is only applied when a defined economic entity, such as a complete business function rather than a large piece of work, is transferred.

Before the transfer, one or more team members must be elected as an Employee Representative to liaise between the company and the consultancy. A full consultation period is then required to ensure the transferees are fully informed of the legal, economic and social implications of the transfer and to enable all negotiations to be seen through to their conclusion. Tupe states that each remuneration package must be matched in full (with the possible exception of terms relating to occupational pension schemes) by the new employer and that any dismissal connected to the transfer will be deemed unfair. It’s a legal minefield with potential claims for discrimination or personal injury and both parties will need detailed advice from solicitors. Be sure to do everything by the book – and it’s a big, complex book.

For all of the restrictions and protocol, the Tupe process allows both parties to discuss and agree the nature and detail of the transfer from the start, including the ongoing working relationship. This goes a long way to ensuring neither party has any unpleasant surprises after the contracts are set in stone and that no claims can be made by those transferring.

Tupe dictates the contract of employment is not terminated when the employee transfers, and that the employee is not ‘selected’ by either the client company or the recipient consultancy. Trimming the team down or even changing the detail of a person’s role will give rise to claims of unfair practice, and this is one of the most sensitive aspects of the transfer, as even if you are playing fair, it may appear you’re not. So an experienced personnel manager is vital, to steer the consultation process and, ideally, to keep records of all decisions and formal conversations between the two companies and the employees.

With the Tupe transfer of Boots the Chemists’ 29-strong team to Jupiter (DW 16 December 2004), we each relied on our own teams of solicitors and personnel advisers. The meetings were often long and detailed and a huge amount of ground had to be covered to stay within Tupe guidelines. But this paid off, as the transfer was smooth, with no issues resulting. Both parties are enjoying the benefits of the transfer and can focus on creating excellent design solutions that deliver for the client, without the need to return to distracting discussions on the transfer’s legalities.

Mark Shaw is the managing director of Jupiter Design

When a Tupe transfer is likely to work • If the client is genuinely intending to improve its design function • If the client and consultancy are both prepared to make concessions • If the client ensures every brief (within the scope) goes to the consultancy

• If performance measures are monitored and maintained for both the client and the consultancy When a Tupe transfer is likely to fail

• If the consultancy cannot assimilate the transferred designers into their culture

• If the client doesn’t deliver the level of work to cover their overheads

• If the consultancy cannot control their processes and efficiencies • If the people transferring cannot deliver quality design work

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