HR departments can ease the pain of staff being transferred under outsourcing agreements.
It used to be that everyone knew someone who had been made redundant. These days, we’re just as likely to know someone who has been outsourced. Outsourcing is firmly embedded as a workplace process and along with it the concept of TUPE (Transfer of Undertakings (Protection of Employment)) provisions. As Gareth Emmonds, HR consultant at international HR and employee benefit consultancy Black Mountain, puts it: “TUPE has become a fact of life.”
But TUPE also throws up a host of knotty legal issues for any HR department to deal with which, if handled incorrectly, can lead to disputes and litigation – ultimately damaging company reputations and employer branding. Taking the right action from the outset, however, should make it a painless process.
HR must lead from the front
The way a TUPE transfer is approached should be the same as any other change management programme and this means that HR should be at the forefront of it, says Emmonds. It’s simply not enough for HR professionals to be liaising with the negotiating team.
“HR needs to be in the project team right at the very beginning,” he says. This means HR has to be fully conversant with the scale, intricacies and timings of the deal so it can be proactive in identifying potential problem areas and where consultation is needed, which will be the case if there are changes to benefits or terms and conditions.
HR also needs to ensure it has a strategic role and that it is involved in the decision to outsource in the first place, says John Ingham, principal consultant at HR specialists Penna Consulting. “That will give it the opportunity to add value and ensure it has plenty of time to get its head around the process.”
Communications are crucial
Employees are likely to display a range of emotions from scepticism and resistance to concern about their jobs, particularly if the first they hear of any deal is through the grapevine.
As soon as it becomes clear that a TUPE transfer is on the cards, it is vital to hold face-to-face meetings with the employees involved and explain what the organisation is planning. If staff are kept fully informed they’ll be less inclined to seek legal redress. Make sure employees know how to voice their concerns. And keep as many lines of communication open as possible – use bulletin boards, newsletters and e-mail.
Emmonds says: “Communication really is the key to it and without it, it will fail. If people feel they are being involved in the process and their voices and concerns are being heard they are more likely to buy into it and it will go smoothly.”
Ensure employee representation
It is HR’s responsibility to ensure that employee representatives are in place, have been properly elected and are appropriately consulted. If there are any changes to the transferring employees’ terms and conditions it is essential to reach agreement on them. Ingham also points out the requirement to be flexible over the consultation process and any issues that may be raised by unions or employees.
Focus on line managers
Line managers have a significant role to play in the communication process and building a climate of trust, says Ingham.
“It leads back to HR and line managers to develop an environment in which TUPE is going to be a fairly easy process to manage – the climate and culture must be right and employees must understand what the business is about,” he says. There must be dialogue and engagement with the business.”
Sell the benefits
The idea that outsourcing is always a negative for the workforce is thankfully no longer true and it is increasingly being seen as good for career prospects. Because of the way outsourcing companies work – ie, they want to realise maximum efficiencies and substantial cost savings – there’s often the opportunity to work with state-of-the-art technology and along with it increased training opportunities as well as the chance to try out different roles and learn new skills.
Review HR competencies
Assess whether there are any skills gaps within the team, especially when it comes to legal matters. Here practical experience of a previous TUPE transfer will also come into its own. Make sure you have enough manpower and resources for the task – this can easily be overlooked when so much else is going on. “Remember that as well as handling the transition period, the department will be expected to run as normal in every other way,” says Ingham.
Don’t miss anyone out
John McMullen, head of international law at Pinsents, highlights the importance of making sure that everyone who should be on the list is on it – individuals who are on maternity leave or long-term sick leave can often be overlooked, he says. “These people need to be contacted and notified and put into the transfer process too.” There may also be ‘borderline’ employees who aren’t fully employed in the undertaking being transferred and whose time is split with other functions. In instances like this McMullen suggests the decision should rest on a simple percentage breakdown of the time spent there.
Handing over and cutting off
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Once the transfer takes place, HR should prompt the transferee HR department to write to all employees to indicate they are now employed by the new company detailing any changes to terms and conditions.
Thereafter, says Derek Kemp, chairman of employment law specialist Human and Legal Resources, it is important that the original HR department doesn’t do anything else. “If people come back with queries, it should direct the employee to the new employer,” he says.
