PR Week’s lead story this week has some profound implications for the PR industry.
There has been much talk in recent times of just how the new TUPE (Transfer of Undertakings Protection Employment) regulations might impact PR agencies and their clients – it now seems we have the answer.
According to PR Week: "An employment tribunal has fired a ‘legal warning
shot’ at the PR industry by ruling that agency PROs have the right to
transfer to a rival firm following a client re-tender.
tribunal ruled that Karis Hunt, a former account manager at Storm
Communications, had the right to follow her client, Brown Brothers
Wines, to a different agency.The precedent-setting case saw
Hunt win an unfair dismissal claim in a first instance tribunal under
the recently amended Transfer of Undertakings (Protection of
Employment) regulations, commonly known as TUPE.
made redundant from Storm when Brown Brothers Wines – her biggest
client – stopped using the agency and turned instead to Wild Card PR,
following a competitive pitch.
Under TUPE, if a PRO’s
principal purpose at an agency is to serve one particular client, he or
she is automatically entitled to continue employment with another
agency, should another agency. In this case, ‘principal purpose’ is
defined as spending 52% of her time on the client."
So – will this serve as the test case for future guidance as to interpretation of the law? Or, as PRCA MD Patrick Barrow thinks: "there is a danger of similiar cases collapsing under the weight of legal argument."
Although this only applies to accounts where personnel spend 52pc or more of their time, this almost certainly would impact a significant number of client accounts – and not just the big ones. Many smaller agencies hinge for their existence on a flagship client – so would face not only losing the client but their people as well.
On the other side of the coin, it puts clients in this situation in a quandary – what’t the point in changing agency if you have to keep the same team – presumably the whole point of changing is to bring in a brand new team. Or perhaps they will ask agencies to reduce the time spent on their account before firing them?
Perhaps agencies will now start finding ingenious justifications to show that any agency exec spends no more than 51pc of their time on a particular account?
This one will run and run.