Any recourse?

Mrs_Optimist

DH was tupe'd across to a new company which won a Local Authority Contract. The new company went into administration 6 weeks after the TRANSFER. A different company "bought" the contract and agreed with the Local Authority to work on it with the existing staff whilst it was retendered. New company was also tendering for the work. The new company has now pulled out of the contract saying it was not viable for them to continue. DH and colleagues are on 30 days consultation. Local Authority cnfirm that the retender process is underway and they anticipate a new contractor being in place within 3 months. My question is, do the Local Authority have any duty of care to the workers TUPE'd across and now being consulted on inveitable redundancy> It seems ludicrous that in 3 months thier jobs will be undertaken by a new contractor, no doubt with new staff.

SarEl

I have wracked my brains and consulted a few legal tomes - I can't think of anything, no. It's a stretch, but if there is a union, it might be worth re-checking the commissioning agreement(s) to see if there is any reference to what might happen to former council staff if the tender breaks down, but I am not hopeful. Effectively, from the point of transfer they were no longer the council's staff and nothing to do with the council. The union may be of more help - they may be able to negotiate something. Again, I can't say that I am entirely hopeful, but it is better than no hope. Sorry

SueC_2

DH and his colleagues have, presumably, continued to do their jobs (although it's not entirely clear who has been paying them). Regardless of who wins the re-tender, would TUPE not continue to apply?

SarEl

It would depend on their employment status at the time of the transfer. If they had been already made redundant, then no it wouldn't. And this at least appears to be a possible outcome since the current employer has already gone into consultation, which would not be necessary of there was an imminent opportunity to retransfer

Foggster

Having been involved in elements of a contracted out service I am surprised that the Council had not undertaken more robust checks on the financial standing of the company that was taking on the contract. You have nothing to lose to approach your union about this element of the current situation. It may be worth contacting a local Councillor/MP and ask them to represent you and your colleagues on the Scrutiny Committee to ask the question.

SarEl

Foggster wrote: »

Having been involved in elements of a contracted out service I am surprised that the Council had not undertaken more robust checks on the financial standing of the company that was taking on the contract. You have nothing to lose to approach your union about this element of the current situation. It may be worth contacting a local Councillor/MP and ask them to represent you and your colleagues on the Scrutiny Committee to ask the question.

Unfortunately this was one of the areas of commissioning that our beloved leaders severely curtailed in recent times, limiting the degree to which councils could explore "probity" in tenders, and also some of the enhanced TUPE protections enjoyed by public service staff in such situations. It is so much fairer if they are in the same boat as other employers in the private sector...

Mrs_Optimist

Firstly thank you all for replying. The Union (UCATT) have been completely silent on this matter - in fact they have been useless. The information that has been ascertained is what I myself have obtained after putting questions to my local councillor who made the enquiries at the Council on our behalf.

DH has never actually worked for the Local Authority. He has worked in the private sector for private companies who have won the Contract. The company that he was originally TUPE'd over to went into Administration after 6 weeks (I think the term was suicide bidding), they bid for lots of contracts, never able to make money on any of them, then went bust because they could not get any more funding from the bank. The Council came to a temporary agreement with a separate firm who bought this contract from the Administrators but because of EU legislation they had to retender it. It was a temporary contract of 3 months whilst the retender process was underway and has been extended and extended until DH current employers said enough was enough, they had been doing the works on the same price as the "6 weeks company" and could not continue. The council have seemingly been dragging their feet because they were getting a good deal.

The council have confirmed that within 3 months a new contractor will be in place. DH will be made redundant. The stupid thing is the amount redundancy and severance pay that it will cost his employers is substantial - much more than simply paying them to stay at home for 3 months (which they did when the contract was purchased from the Administrators) until they can TUPE across to the winning company. My suspicion (and that is all it is) is that the Council and employer have reached a deal and that it would not surprise me if the employer wins the tender and recruits new staff at less attractive rates of pay and T&C. I am unsure whether this is legal or if there is a sepcific time period to elapse before they can be sure that there will be no come back.

I was told that the Council did have certain duties of care to the staff because the contract has been handed back and so a TUPE situation could apply again, but don't know how correct this is. As previously stated, the Union have been of no use whatsoever, which I have found very disappointing

Thank you for your responses though, this board is always helpful.

Mrs_Optimist

Also to add, the original TUPE occurred last year, and DH worked for the winning company from 1st June until 6 weeks later! The new company bought the contract and confirmed in writing that they were DH new employers and he would keep his t&c. My understanding (don't know whether this is correct) is that the new legislation loosening the regulations came in March this yeear and was not retrospective, which presumably means that the Council would still be accountabe for the research (or lack of) that went in to ensuring the sustainability of the winning bid last year. I know that they undercut everyone else by a hefty margin which should have fired a warning shot to the Council. They also did not expect to inherit the staff when they won the contract. The Council have also confirmed in writing to me (via my Councillor) that "assessing the sustainability of any winning bid would be a key part of the evaluation process" (if only they could have done this last year).

SarEl

Ah - I had assumed, as I think did others, that this was a council service that had been contracted out, but it isn't. So no, the council has no duty of care to employees of the contractor. Their only duty of care, if you care to call it that, is to take the lowest viable bid, and that is what they have always had to do.

If this is covred by EU tendering regulations then I am not surprised that they have been "dragging their feet" - it's a trotuous process and whoever thought they could retender in 3 months was extremely optimistic. But the fact is that whatever the cause of the delay, the council don't have any resonsibility towards private sector employees at all, and have even less legal powers to check the financial status of tenderers because basically, they are nothing but customers buying a service. There has always been some limited ability to check the trading status of a bidder, but sustainability of the bid is much more limited than you would think.

Basically all ability to make a claim to a tribunal runs out three months less a day from the date of termination. But a claim would be rather weak if the reason for redundancy is legitimate - which based on what you say is probably the case. The employer hasn't exactly acted in bad faith - they have said that they do not intend to bid for the contract and whilst they do have legal responsibilities if a new contract is awarded before staff are made redundant with regard to TUPE, they have no responsibility to keep staff on if they have no future requirement for them. It is entirely possible that the redundancy exercise is a pre-emptive move to cover their backs if no other contractor is found, just to ensure that they don't end up with a whole load of staff they can't use. Remember, redundancies can be withdrawn right up to the last minute of notice, so they may just want to play it safe.

Mrs_Optimist

Thank you SarEl.

The employers were bidding for the contract. Is this something that they should be asked when 1 to 1's are happening tomorrow? Ie "do you still intend to bid for the contract?" And if the answer is "yes" will that make any difference to the redundancies?

The employers have, to be fair, been very goood with all the workforce and fought so hard to be able to take on the contract albeit on a temporary measure - to the extent that they paid everyone to stay at home on full pay for 3 months whilst a temporary deal was thrashed out. That is why their sudden change of mind is so confusing. They will certainly have their fingers burned financially - some of the workers originally worked for the Local Authority and have VERY generous redundancy packages as a result. In fact it will cost the employers more to make everyone redundant than it would to just pay for them to stay home whilst a new contractor is found, but I see what you are saying as to the feasibility of that happening.

As frustrating as it is, we will be able to manage, thankfully, financially so do not have the same concerns as perhaps some of the others. This has been dragging on for 12 months so if after the 1 to 1 tomorrow DH is made redundant, it will in a strange way, be a relief to finally see an end to the matter. I know that I am sick of firing off emails ! I am also heartily disappointed with the Union who have promised the earth and delivered nothing, not even updates.

Mrs_Optimist

UPDATE:

Things have taken a new turn. I have been in coorespondence with the Local Authority who have confirmed vie email that they would not entertain using DH employers on new contract. They have no duty of care to the employees (in spite of UCATT saying otherwise). I have gleaned from the helpful responses on here to date that they are right in that respect. The contract will be in place with a new contractor within 3 months. The Local Authority tried to come to an agreement with the current company but were told "NO CAN DO". They have also said that they will point new contractor in the direction of the current workforce should they need to recruit staff to service the works - although the Council could not request that they do so, nor could they guarantee t&c would be the same. Fair enough.

HOWEVER DH had his 1 to 1 today and according to his employers they are still in negotiation with the Council! When DH told them that the Council had a shortlist of 4 companies who were currently preparing their tender, and that the new company would be in place within 3 months, his employers asked for a copy of the email and got quite narky. They haven't said that they are still tendering, nor have the Council confirmed or denied, but reading between the lines they may well have done.

Now I have no intention of showing this email as it is between me and the Council. I am wondering though, whether DH employers are trying to get out of paying redundancy by saying the Council have walked away from the contract not them. The email would help their case in some respects because the Council have confirmed that they are not prepare to liaise further with current employer. Does any one know if this would have any bearing on whether redundancy is applicable? It is at present, but if the employer could prove the Council walked away would that mean the Council are liable?