The Technicalities and Legalities of Outsourcing - By: Kimberlie Hutson

TUPE is the acronym for Transfer of Understanding Protection of Employment and is a fundamental UK labour law which is designed to protect any employees of a business which is being transferred to another business. Whether or not it was applied during an outsourcing process would depend on the nature of the project, in many cases TUPE would apply, and therefore any professional outsourcing company would have extensive experience of that and it would be built into the planning process, if there were certain service that were being taken over by the provider, then TUPE would definitely apply.

There are several benefits which can be achieved if TUPE is applied, under the TUPE regulations, the terms and conditions and pay rates of any people transferring to the service provider cannot be changed. However, there can still be benefits and improvements from the outsourcing process in so much as changing the operating procedure and culture of the new operation and implementing productivity and process change to provide the benefits that are being sought as part of the project

If the client was using a professional service provider, specialist support, such as employment legislation advice, would certainly be something that would come as part of that package, in managing any outsourcing project, one of the most important aspects is managing employee Legislation, HR expertise. Any professional service provider would provide all that support to the client and have extensive experience and knowledge of the pitfalls along the way.

The Agency Workers Directive (AWD) changes, which are proposed to come into force in April 2009, means that temporary employees who have been with a company for 12 weeks or more will enjoy the same terms and conditions and pay as permanent employees doing the same role. This means that there can be no simple benefit, in terms of lower cost labour or increased flexibility labour, by using temporary staff for a period of longer than 12 weeks. The Agency Workers Directive will have little impact on outsourcing. Any staff engaged through an outsourcing company will always remain in the employee of the outsourcing company and not the client. The AWD changes will mean that businesses will have to look at a more sophisticated way to bring in that level of flexibility, outsourcing is one way of being able to provide that because the employees of the outsourcing provider can be on a fundamentally different contract, different conditions, and different working practices from the clients.

In a union environment it would be absolutely essential to evolve the unions at an early stage of outsourcing, obviously any form of change can create uncertainty and it's the unions responsibility to protect the interest of their members. Therefore it's the responsibility of the service provider and the client to fully engage with the unions so they're completely clear of the objectives and the reasons for going down the outsourcing route.

The outsourcing process would be carried out on the clients' premises and as a result, the overall responsibility for health and safety remains with the client. A professional service provider would ensure they understand all the health and safety procedure and systems within the clients operation and therefore ensuring that as a minimum they're implanted within their own team within their own workforce and therefore would be fully compliant with all the companies health and safety.

About the Author

The Aktrion Group offers unparalleled operational and management expertise to run critical parts of their clients' operations on a contract outsourced basis. Exclusively on GuruOnline, Aktion offers free outsourcing advice on improving performance, service levels, reducing costs and maximising flexibility all through outsourcing.

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