The tribunal ruled that Karis Hunt, a former account manager at Storm Communications, had the right to follow her client, Brown Brothers Wines, to a different agency.
The precedent-setting case saw Hunt win an unfair dismissal claim in a first instance tribunal under the recently amended Transfer of Undertakings (Protection of Employment) regulations, commonly known as TUPE.
Hunt was made redundant from Storm when Brown Brothers Wines – her biggest client – stopped using the agency and turned instead to Wild Card PR, following a competitive pitch.
Under TUPE, if a PRO’s principal purpose at an agency is to serve one particular client, he or she is automatically entitled to continue employment with another agency, should another agency. In this case, ‘principal purpose’ is defined as spending 52% of her time on the client.
Bob Mecrate-Butcher, partner at employment law firm Pinsent Masons, said the landmark case was ‘big news for the PR profession’. He added: ‘The kicker is for the client. This undermines their decision to re-tender, which is ultimately to have new blood on an account.’
Employment law firms are adapting in anticipation of an increase in TUPE cases in the PR, marketing and advertising industries. Mecrate-Butcher warned that PR agencies may consider spreading more of their employees across the business.
Patrick Barrow, MD at the PRCA, said: ‘This is a legal warning shot for the industry.’ However, he added that there was a danger of similar cases ‘collapsing under the weight of legal argument’.
There will be a further hearing at the end of the summer to decide the extent of Hunt’s financial compensation, according to David Grey-Jones, solicitor at law firm Thomas Mansfield, who is representing Hunt.
Brown Brothers Wines shifted its PR account to Wild Card in August last year.
WHAT TUPE MEANS
Implications for agencies...
- If an agency wins a new client, it could be forced to hire staff from the client’s previous retained agency.
- A TUPE claim relies on a PRO serving one ‘principal’ client
Implications for clients...
- Despite a re-tender, a client may find the same team PROs working on an account
The CIPR has created guidelines on employment to take into account the implications of TUPE. Download them at www.cipr.co.uk/research