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Flagship homes job hit by legal dispute

Lawyers have been called in to sort out a legal spat on a £1 billion framework intended to act as a flagship for partnership working in housing refurbishment.

The wrangle centres on whether it is legal for one of the firms that has now been removed from the framework due to poor performance to transfer staff to one of the remaining firms without their agreement.

Last year, two firms were dropped from a deal with Sheffield Homes to spruce up 55,000 of the city’s former council homes. Mears’ and Connaught’s involvement with the job ran out two months ago.
But project sources have complained that remaining members of the framework could end up picking up any redundancy bill on staff transferred across under the TUPE from one member of the pair, Connaught, because of a legal loophole.

Lovell and Henry Boot are understood to have been lined up to take on ex-Connaught work, and thus it staff.

One project source said: “If Connaught hadn’t been able to transfer or find work for these guys it would have had to make them redundant at great cost to the business.

“By transferring the workers it gets rid of this problem but if the companies who the workers are transferred into have no work for them to do, then they themselves may end up getting hit for redundancy costs for workers that they themselves didn’t employ.”

Connaught wrote to Sheffield Homes claiming such a move was legal but at a board meeting of Sheffield Homes in April directors were told their own legal representatives had said this was incorrect.
Group HR director at Connaught Phil Bowden confirmed the firm had been looking to transfer staff to remaining framework firms.

He said: “Just over 20 of our staff have been successfully transferred within the Sheffield framework. We are working in collaboration with another service provider towards a suitable outcome for the remaining 24, who in the meantime remain in our employment.”

Connaught is understood to be meeting with one firm to arrange a potential TUPE transfer this week.

Mears is understood to have already redeployed its workforce onto other projects. The other members of the framework that have so far been unaffected are Keepmoat, Kier and Wates.

Henry Boot and Lovell declined to comment but a Sheffield Homes spokeswoman said: “We are taking advice on TUPE and are unable to comment.”

Connaught is understood to have carried out a similar transfer process for some of its workers after losing a deal to work with Wirral Partnership Homes. It transferred 14 staff members to Bramall, one of three firms taking its place.

But Connaught claims that the transfer was done with Bramall’s agreement, with the firm able to cherry pick the staff it wanted from the 70 available.

Some 46 other staff have been redeployed on other Connaught projects, four have moved to Wates while the remaining six are currently awaiting news of redundancy.

The Sheffield framework

Initially awarded in December 2004, the early Sheffield Homes framework featured five firms – Connaught, Keepmoat, Kier, Lovell and Mears – tasked with delivering £1 billion worth of works over seven years.

As a Constructing Excellence demonstration project, it sought to “set new standards of performance through integrated team working, delivering a high standard of design quality and innovation, optimum whole life costs, efficient delivery and installation”.

Up to 500 apprentices were expected to be taken on in the first three years as part of the agreement between Sheffield Homes and its contractors.

In late 2006, Wates and Henry Boot were added to the framework amid reports of problems with the work of Mears. So far, about £450 million of work is understood to have been delivered under the framework.

For more housing news see cnplus.co.uk/housing