Editorial: Redundancy issue still carries a sting

campaignlive.co.uk, Friday, 09 July 2004 12:00AM

If you were attending Cannes this year, you could be forgiven for feeling that the good times are back. Lavishness was on the menu in a way it hasn't been for three years: yachts, Champagne and three-star restaurants were the order of the week. It's been a tough few years, so the temptation was to let Cannes help us put the downturn squarely behind us. But only a week later, the ad industry was coming to terms with more redundancy news.

Take Broadway, the fast-turnaround agency formerly a subsidiary of Lowe, which could be about to set a new precedent for how redundancy is handled by the industry. Following Vauxhall's decision to move its retail business from Broadway to Delaney Lund Knox Warren & Partners, Broadway has advised its employees to invoke Transfer of Undertakings Protection of Employment regulations. If applied successfully, the burden of responsibility for the Broadway staff previously working on the Vauxhall business will be shifted on to DLKW. In the meantime, the insecurity of the individuals involved is intense and prolonged. Staff will have to go to tribunal and fight for their jobs or redundancy payments. One distressed staffer phoned Campaign to say: "It's a very frightening situation to be in."

Lawyers are currently picking over the claim but, if TUPE is successfully invoked, it could set an important precedent that would mean every account win brings with it the potential cost of hiring the incumbent team.

Until now, the volatility of the advertising business has meant, broadly, that agencies that are doing well soak up the excess employees of their underperforming rivals. This is a process that Matthew Bull, the chief executive of Lowe, has attempted to enhance with an unusual ad in last week's edition of Campaign. A severe cost-cutting process triggered by the loss of its HSBC business has culminated in 45 Lowe staff being made redundant. When the number of people losing their jobs is so large, you know the agency is not simply getting rid of stragglers; there will be a lot of talented workers among them. So Bull was moved to finance - out of his own pocket - an ad that acknowledged the damage the HSBC loss had caused and asked the industry to find work for the employees whose jobs had gone.

By Friday, he had been inundated with calls. By appealing to a collective sense of responsibility that exists, but rarely shows its face, Bull has highlighted the industry's strengths at a time of economic crisis. The TUPE law, if it is found to be applicable to advertising, could have the opposite effect.

This article was first published on campaignlive.co.uk

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