Thursday 11 October 2007

Outsourcing, TUPE and union recognition

UNITE recently secured a very important ruling by the Central Arbitration Committee (CAC) which will help many people affected by outsourcing, including those working for the IT outsourcing companies in our sector.

The case arose where Boots had outsourced IT functions to Xansa, resulting in employees transferring into Xansa under the TUPE regulations. Under TUPE, union recognition normally transfers with the employees, but many outsourcing companies try to avoid the bargaining unit being viable in the long term using tactics like:

  • Restricting the bargaining unit only to those who originally transferred, excluding new employees or existing employees who start working on the contract
  • Telling employees they can't move out of the original contract into the wider company unless they harmonise terms and conditions and leave the bargaining unit
  • Mixing up the TUPEd employees with others from the wider company who are on different terms and conditions
The CAC is the body charged with ruling on applications for union recognition under the statutory procedure (as well as a few other functions). In this case, the argument was about what the appropriate bargaining unit would be. The ruling on Case Number: TUR1/568(2006) is available on the CAC web site. The decision says:

17. The bargaining unit consists of those workers employed by Xansa UK Ltd working at the Boots site in Nottingham who are either transferees from Boots to Xansa (whether they have subsequently moved onto Xansa terms and conditions or not) or who have at least one year’s continuous service on the Boots site.

This means that the bargaining unit won't dwindle and "die on the vine" over time, but can include new employees. It also unlinks bargaining unit membership from harmonisation.
CAC rulings don't form a precedent in the true legal sense (that other courts are obliged to follow the ruling), but the fact that the CAC has ruled this way in one case clearly opens it up as a possible avenue for unions in other cases.

It will be interesting to see how widely UNITE and other unions adopt this approach to defend and extend recognition after outsourcing.

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