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Employment law changes impact outsourcing
Tupe more likely to apply...

By Steve Ranger

Published: Friday 09 June 2006

Changes to European employment legislation could make it more applicable to outsourcing contracts, according to lawyers.

The new Transfer of Undertakings (Protection of Employment) Regulations - know as Tupe - were updated in April this year, and will bring in changes for employers and outsourcers, according to law firm Osborne Clarke.

James Mullock partner at the law firm explained: "The law has been around since the early 1980s so it's not new. At a European level there has been a new directive that has clarified some parts and makes it more likely that it will apply to offshore outsourcing.

"If you are a European company this is something that you need to consider."

Mullock told the Offshore Customer Management conference in Cairo: "For customers this should add certainty to an issue they are already aware of. And for the offshoring providers it confirms that Tupe will more often than not apply to offshore contracts so they need to understand the consequences."

He said the changes will make it clear when the law applies - and that because customers are likely to try to push the cost of compliance onto the outsourcers, it is in their interest to understand the changes.

One of the biggest changes is the introduction of a new type of transfer known as a service provision change, which the government expects will result in the application of Tupe to up to 880 more businesses each year, providing protection to another 21,000 employees each year.