Editorial: TUPE will make a mess of the advertising industry

It is called TUPE (pronounced "to-pee") but do not be fooled by its deceptively cute name. It is short for the Transfer of Undertakings (Protection of Employment) Regulations - and its impact on the UK ad industry could be huge.

Hard as it is to imagine, the rules (which take effect early next month) could force agencies to scrap account teams working for a single client.

Worse still, agencies may be prevented from pitching for fear that winning could saddle them with liabilities costing thousands of pounds.

This nightmare scenario is something no-one wanted. Certainly not agencies and their clients. Probably not the Government, which has always stressed the importance of stimulating the country's creative industries.

Unfortunately, advertising is the victim of government efforts to safeguard the rights of public sector workers. As a result of privatisation and contracting out, thousands have been transferred to the private sector.

Many have lost important rights in the process. But while protecting such workers is admirable, the rules threaten to cause needless havoc among professional services such as advertising.

If the regulations are rigidly enforced, an agency winning an account from a rival may find itself having to hire that agency's account team, if it is dedicated to the specific piece of business. How ridiculous it would be if a small agency were prevented from going after a big account because it could not afford to take on the incumbent's employment liabilities. And how ludicrous that an agency might go into a pitch not knowing what its liabilities might be if it won.

TUPE does little to safeguard agency staff caught in the middle, either.

They may not want to leave their agency, but could lose their employment protection rights by staying put. Neither is there any benefit for clients, particularly retailers and car-makers, who want the consistency of output that comes from a dedicated team. What is more, if they put their account up for pitch, they may find it harder to draw up the shortlist they want.

And surely the usual reason for a pitch is to bring fresh thinking to the business?

The IPA, which is currently taking legal advice, has promised to press the Government for advertising to be exempt. Everybody will wish it success.

As far as advertising is concerned, TUPE is an ill wind that will blow no-one any good.

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