In today’s business world the search for profit often leads to companies divesting themselves of service teams and hiring the work out. – But what are your rights if your job is outsourced? Our guide looks at why jobs can be outsourced, and employee rights during the process.
Jobs are outsourced to other companies so that they can concentrate on their core business. But what happens to the people who are doing those jobs and find that they are going to have a new employer? What rights do you have if your job is outsourced? What employment law offers protection?
The History of Outsourcing
Outsourcing started to happen in the 1980s. Management consultants decided that it would be a good idea if large businesses offloaded some staff to separate companies.
This makes the businesses appear more profitable. When they outsource jobs, they do not have those overhead salaries on their books. The business will then pay the company that took the staff off their hands, in return for thir services.
It started with easy-to-hive-off services, such as cleaning and catering. Then moved to more complex roles, such as customer services and IT Support.
There are other advantages to the business that has outsourced the jobs. Such as, after the initial contract expires, put the contract out for tender to other service companies. This allows them to lower the price they pay for the service.
Continuation of Terms and Conditions for Outsourced Workers
If your job is outsourced, the employer that is handing the staff over has obligations to their employees. The business that employs them must also protect their working rights.
These rights are laid out in a set of regulations called the Transfer of Undertakings (Protection of Employment) Regulations. They are normally known as TUPE.
TUPE rules state that the new employer should continue with the same contracts & terms and conditions of employment as before. It specifically protects pensions, holidays and continuation of service, as well as many other aspects of working life.
The continuation of service element is important because the length of service that an employee has accrued controls many aspects of workers’ rights.
Redundancy payouts, holiday allowances and pensions are just some of the areas where rights improve as time passes.
The upshot of this protection is that you will be treated as though you do not have a new job. Your years of service will pass on to the new employer. So if you have nine years service with the existing business, when your job is outsourced to the new company you will still be treated as though you have nine years of service.
Consultation on Job Outsourcing
It is not legal to outsource jobs to a service company without consulting employees.
The consultation should be with trade union representatives or, if no unions are active in the firm, an elected body of employees.
The consultation phase should make sure that all affected employees are given notice of the change by the employer. The impact of changes should be explained clearly. Detail any other elements of reorganisation that may happen at the same time should also be shared.
What Happens in the Future to Outsourced Employees?
If an employee stays with the new employer after the transfer and, when the original contract expires, a new business wins the tender to supply the original firm, then TUPE should apply again.
The terms and conditions would transfer once more to the winner of the contract. If employees turn up for work and are told there isn’t a job for them, then they will have good grounds for an unfair dismissal claim.