McCann and Euro in TUPE legal dispute

Euro RSCG's Reckitt win could lead to employment law test case for UK shops.

Euro RSCG London and McCann Erickson are set to lock horns in the first high-profile confrontation over controversial new employment laws.

The battle centres on Euro's Reckitt Benckiser win last month and whether McCann staff who worked on the account have rights under TUPE (Transfer of Undertaking Protection of Employment).

McCann Erickson London lost its Reckitt-owned Boots Healthcare International account to Euro in the review. McCann is thought to have told staff they have had a right to a job at Euro since the account moved on 1 August.

If a TUPE transfer applies in this situation, staff who worked "wholly or predominantly" on the business will be entitled to continuity of employment with the winning agency. Any offer of redundancy to those involved could potentially negate this right. Euro is arguing TUPE does not apply in this situation.

JWT also lost its Reckitt business when the FMCG business realigned globally last month. However, a JWT source said there were no plans for any staff to move with the business when Euro assumes responsibility for the account on 1 January 2007.

The IPA unsuccessfully petitioned the Government to exempt the ad industry from TUPE in March this year.

Hamish Pringle, the IPA director-general, said: "We have predicted a test case such as this for months. We don't relish it, but it would clarify things and might be good for the industry as a whole. If ever there were a clarion call for the Government to reconsider TUPE, this is it."

Euro and McCann Erickson declined to comment.

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