Should adland be exempt from Tupe?

The IPA wants employment rules that are unhelpful to the ad industry altered, John Tylee writes.

IPA against Tupe regulations
IPA against Tupe regulations

The Tupe regulations may not have made the bang predicted when they were foisted upon a reluctant adland six years ago, but neither do they show any indication of expiring with a whimper.

Which is why the IPA is urging the Government to amend the controversial employment legislation rules. It claims the rules take no account of the way the ad industry operates, are a costly waste of time and fall short of their intended aim of boosting employee protection.

In a response to the Government's call for feedback on how Tupe is working, the IPA suggests that professional services - such as advertising - should be exempt, or should have better guidance so that the costs and risks caused by Tupe are reduced.

Implemented in April 2006, the Transfer of Undertakings (Protection of Employment) Regulations - to give Tupe its full name - were greeted with much foreboding by industry trade bodies.

There were warnings of Tupe creating a doomsday scenario, with agencies forced to scrap account teams working for a single client and being prevented from pitching for fear of having to take on the incumbent's employment liabilities.

Some went so far as to predict anarchy, with account staff from the incumbent told to report for work at the new agency and finding the door slammed in their faces.

The upshot of Tupe has actually been much less dramatic, with no reports of large, stateless account teams forced to look on while lawyers from warring agencies argue over them.

In fact, pragmatism usually prevails when incidents of this kind occur. In 2009, JWT and Leo Burnett reached agreement about redeployment of staff when Kellogg moved almost its entire global business from the former to the latter.

In December last year, 25 staffers, who could have lost their jobs when Virgin Media's £36 million account left DDB UK, were able to move under Tupe regulations to Bartle Bogle Hegarty, which took over the account, and to Rapp, which handles the client's direct marketing business.

So why the need to remove adland from Tupe's clutches? Partly, it's because of the red tape it creates and also because clients are often insisting that agencies indemnify them for any Tupe liability.

"Employment law is increasingly onerous," Stephen Woodford, the chief executive of DDB UK, says. "But, as a people business, we need flexibility above all else."

Another reason is the staffers, who find themselves caught in the agency crossfire precipitated by Tupe, but who have neither the time nor the money to fight their cause at an employment tribunal. Their concerns are reflected in the steady stream of calls to the Nabs advice line from those worried about how Tupe might affect them.

"We recognise the merits and intent of Tupe to protect employees," Zoe Osmond, the chief executive of Nabs, says. "However, this is often abused and proves on many occasions to be disruptive to both individual and company.

"People become disillusioned and have no sense of loyalty," she adds. "They feel like they are a piece of luggage."

Whether or not Tupe will be reformed remains to be seen. When a European Union directive is implemented, the rules are hard to amend. And civil servants claim that defining who should be exempt would be a nightmare.

"The chances are that this will remain in a box marked 'too difficult'," one industry source predicts.

LAWYER - Juliet Bawtree, employment lawyer, IPA

"Although agencies have learned to work with Tupe, the regulations are a nuisance and cause much unnecessary red tape.

"Tupe makes the pitch process harder, causes confusion and forces agencies to spend huge amounts of time just to comply with their statutory obligations.

"The regulations were originally designed to protect low-paid workers when businesses were transferred from one owner to another. We believe service industries should be excluded from Tupe. If not, there should be clear guidelines for employers and employees on where Tupe applies.

"I'm sure the response to the Government's consultation will be that Tupe isn't fit for purpose."

AGENCY HEAD - Phil Georgiadis, chairman, Walker Media

"I fail to see how a law designed to protect the rights of unskilled and low-paid workers is appropriate to the highly skilled and competitive world of advertising.

"Tupe might be a necessary safeguard for cleaners at risk of losing their jobs when a cleaning contract changes hands, but it makes no sense in our industry where it is time-consuming and where the only people to benefit are the HR advisors.

"Tupe only works when people working on an account actually want to transfer to the new agency. Most would rather be working at the agency of their choice."

AGENCY HEAD - Chris Hirst, chief executive, Grey London

"Lawyers are the only people to benefit from the Tupe regulations. For agencies, it just means extra costs and less money that can be reinvested in the business. We must have employment laws, of course, but the fact is that Tupe does nothing to protect job security in our industry.

"All it does is shift redundancy costs from the agency losing an account to the one that wins it.

That agency has no emotional ties to the people it has to take on, so it's easier to make them redundant than it is to axe any of its long-serving staff."

INDUSTRY BODY HEAD - Debbie Morrison, director of consultancy and best practice, ISBA

"It's nonsense applying Tupe regulations to the ad business. The reason most clients move their accounts is because they've come to the end of the road with their existing agencies, which have failed to crack the brief. The last thing they want is people from the old agency joining the new one to work on their business.

"Tupe has never stopped clients reviewing agencies. It just means that when they do so, they have to carry out a risk assessment and deal with a load more extra red tape that they don't need."

Got a view? E-mail us at campaign@haymarket.com