NEC is pleased to present the latest practice note written for adopters of the NEC4 Facilities Management Contract (FMC) – this time on the inclusion of clauses relating to employment protection rights.
Unlike most (if not all) project contracts, which are one-off projects for a new or refurbished asset, and could be contracts under the Engineering and Construction Contract, facilities management service contracts are often a continuation of an existing required service. The client has, for example, an existing building or road, has had it maintained for many years, and is now re-tendering it for another period of time.
In the United Kingdom, employment rights of staff and operatives employed by a client or service provider are protected by legislation, and impact on any following contract in that those staff and operatives may have the right to be transferred to the new service provider to continue their employment and retain their employment rights. The legislation in the UK is known as the Transfer of Undertakings (Protection of Employment) Regulations 2006, or TUPE. These rights can have a significant impact on the commercial considerations of any prospective service provider and the contract needs to be very clear where the risks and liabilities lie for these rights.
This practice note gives guidance to a client and service provider on the issues to be considered and how employment protection clauses can be incorporated into the FMC (or indeed any other NEC term contract such as the TSC). It does not in any way attempt to draft TUPE clauses for inclusion in a contract. Such clauses require very careful attention, and a client and service provider will almost certainly obtain their own legal advice.
The United Kingdom of course is not the only nation with legislated employment protection clauses, and this guidance is applicable to contracts in those countries too.