If, despite the presumption that no employees will transfer at the start of the Services Period, it transpires that there are Transferring Staff, the WIDP Contract includes measures to manage this, starting with the Authority offering employment to the Transferring Staff before the Contractor proceeds to make any necessary redundancies. Under an indemnity, the Authority is responsible for the Contractor's related Employee Costs. The Authority agrees to indemnify the Contractor for any claims made by the Transferring Staff relating to the actions or omissions of the Authority before the beginning of the Services Period. Typical examples of where this Authority indemnity might apply include:
• pre-transfer employment liabilities, such as industrial injury claims;
• the Authority's failure to inform and consult with the representatives of employees who may be affected by the transfer in accordance with the requirements of TUPE; and
• claims for unfair dismissal.
Under the current WIDP Contract, the Contractor is obliged to ensure that it and its Sub-Contractors comply with the Code of Practice on Workforce Matters in Local Authority Service Contracts - also known as the Two-Tier Code. In practice, this means that any new employees working alongside their ex-public sector colleagues should be offered terms and conditions which are overall fair and reasonable and no less favourable to those enjoyed by the majority of those colleagues. The Contractor must indemnify the Authority for non-compliance with the Code49.
The Contractor is required to indemnify the Authority for any claims in respect of unpaid contractual or statutory pay or benefits, where such claims are made by anyone employed or engaged by the Contractor and where they arise during the Services Period.
There is also an indemnity in favour of the Authority or a Future Service Provider for claims caused by the Contractor or its Sub-Contractors, where losses are sustained by anyone employed or engaged in the Services during the Services Period.
The Contractor is required to provide assistance to the Authority as it prepares for a retendering, and this includes an indemnity where the Retendering Information or Employee Liability Information it provides is inadequate.
The Contractor must also indemnify the Authority and any Future Service Provider against claims made by employees returning to the Authority or transferring to a Future Service Provider, where the claims arise on or before the date of return or transfer, as appropriate.
The Authority also benefits from an indemnity in respect of any claims made by the personnel of the Contractor or its Sub-Contractors, where their employment does not transfer to the Authority or a Future Service Provider under TUPE.
Schedule 20 contains alternative pensions drafting for cases where there is or is not a TUPE transfer. The pensions drafting for use on projects involving a TUPE transfer contains indemnities in favour of the Authority.
The Authority may find it helpful to refer to the Local Partnerships publication "Workforce Matters in Local Authority Public Private Partnership Agreements: Guidance and Standard Drafting for Authorities in England and Wales (July 2010).50
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49 On 23 March 2011 DCLG withdrew the Workforce Code with a view to removing obstacles for contractors tendering for outsourced Local Authority service contracts. The withdrawal is not retrospective and the Workforce Code will continue to apply to existing contracts where it already applied. At the time of withdrawing the Workforce Code, DCLG notified of its intention to consult on which alternative provisions should be introduced. DCLG have therefore written to interested parties to obtain their views on an alternative such as the Principles of Good Employment Practice as in the case of Central Government for outsourced contracts. Contract Managers will need to consider with their Legal Departments how best to respond to this development although it is not expected that many Authorities would consider it for removal until the expiry or re-tendering of the existing Contract.
50 This publication is available online at http://www.localpartnerships.org.uk/UserFiles/File/Legal/Final%20Updated%20Workforce%20Guidance%20July%202010.pdf