TUPE: PRWeek's lawyer on the latest developments

PRWeek sister title Campaign last week revealed that Euro RSCG London and McCann Erickson are set to 'lock horns in the first high-profile confrontation over new employment laws' (see www.brandrepublic.com).

The story related to Euro RSCG's Reckitt Benckiser win and whether McCann staff who worked on the account have rights under the Transfer of Undertakings Protection of Employment Regulations (TUPE).

PRWeek covered TUPE in our 30 June issue and asked readers to submit questions to David Hunt of law firm Farrer & Co. Here he provides some answers.

Can clients avoid TUPE by awarding a contract "outside of TUPE"? Graham Goodkind, chairman, Frank PR 

There is no right to opt out of TUPE. But the parties can agree within the contract who will bear certain employment costs both on the commencement and the termination of that contract.

For example, an agency could be asked to bear the costs associated with its own employees on the termination of an account.

Are there any loopholes for agencies winning accounts from other agencies? Anonymous, London

There are no real loopholes. An agency can seek to compromise transferring employees' claims should they not wish to take them on. But in order to do so, the agency will have to offer them compensation and ensure they enter into formal compromise agreements, which are only binding if the employees take independent legal advice on the terms.

The alternative, if practical, would be to ask the client to pay the costs associated with dismissing any transferring staff.

An agency is placed on six months' notice. Can the agency change the account team and then insist the new team moves to the new agency under TUPE? Anonymous, London

Often the agency's contract with the client will prevent this. If it does not, it is theoretically possible.

However, an employment tribunal is likely to see through any such arrangement where it is simply a sham put in place to try and avoid TUPE.

Where TUPE applies, does the employee's contract of employment terminate, even if you want to keep him/her and s/he does not want to leave? Sheila Gimson, joint MD, Portfolio Communications

Where TUPE applies the employee's contract transfers to the new provider. Staff can always object to transferring.

If they do, their contract is treated as terminated but they are not deemed to have been dismissed. Their rights will then be limited and they will be reliant on their old agency re-engaging them.

What happens if the individuals are freelancers? Anonymous, London

Only employees transfer under TUPE. If the individuals are genuine freelancers they should not have employee status and will not transfer under TUPE.

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