Lawyers warn new outsourcing rules could unleash litigation

PROPOSALS designed to make it easier for businesses to outsource staff could inadvertently unleash a “wave of litigation”, lawyers have warned City A.M.

The government is currently consulting on changes to TUPE – the law that protects outsourced workers’ rights. One plan involves reducing the legal protection given to such workers, making it easier for businesses to dispose of underperforming staff if they switch outsourced suppliers.

However Jon Taylor of commercial law firm EMW said abolishing the protection would actually introduce uncertainty and cost businesses more: “The proposals will not solve this problem, and will create a bigger one instead. The law will give no certainty on whether businesses can freely restructure their contractor staff or not, and this legal uncertainty is likely to start a wave of litigation over the issue.”

“Ironically, the provisions were brought into effect in 2006 to give businesses a level of certainty over whether outsourcing was caught by TUPE because the position had been unclear prior to that.”

He also warned that unions in the public sector – where outsourcing contracts are common – are likely to challenge any change in the law.

A government spokesman said: “The government has issued a number of proposals designed to remove any unnecessary gold plating and ease the regulations for all parties involved.”