TUPE: no 'tinkering' with directive plea

The European Acquired Rights Directive must be fundamentally changed to clearly exclude the letting of contracts for the supply of goods and services from its scope, say UK contractors. They have told the Government that any 'tinkering' with the current wording of the directive could cause even more problems than already exist.

They go so far as to say that, if radical reform cannot be achieved, it would be better to make no changes at all.

The EC is now considering amendments to the directive, which is put into force in the UK through the TUPE regulations. However, Brussels sources suggest that changes to the directive are unlikely to be agreed before 1996.

The key demand is that a reformed directive should include a specific provision to the effect that entering into a fixed term or terminable contract for the provision of goods and/or services should not constitute a transfer of undertakings.

The EC itself has already acknowledged that the directive, as presently worded, can act as a deterrent to companies seeking to 'rescue' some operations in the case of an insolvency. Again, UK firms are calling for the complete exclusion of all transfers arising from an insolvency.

A joint team of building and civil engineering national contractors has already forwarded a detailed submission on acquired rights reform to the Department of Employment.

Comments have also been submitted by the Engineering Construction Employers Association. It warns that TUPE regulations 'are having a significant effect on the repair and maintenance sector of the engineering construction industry.'

As a final act before withdrawing from the European Contractors Federation, the Federation of Civil Engineering Contractors has urged FIEC to make reform of the Acquired Rights Directive a priority for 1995. The FCEC says European court interpretations of the directive 'have resulted in it becoming virtually impossible for contractors to compete for contracts carried out by public authorities.'