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Government in legal quandary over TUPE

THE GOVERNMENT will have to break European Community law if its proposed new guidelines on compulsory competitive tendering (CCT) are to give contractors a fair share of a potential 1 billion local authority market.

The Department of the Environment (DoE) says it is to issue new CCT guidelines in the next few weeks. These are expected to set out ways to overcome TUPE (Transfer of Undertakings Protection of Employment) problems. Martin Prince, of the Building Employers Confederation, said: Contractors are currently boycotting tendering for local authority housing maintenance jobs because they regard TUPE as an insurmountable obstacle.

But the DoE appears to have hit an obstacle in its attempt to bypass the need for contractors to take on direct services organisation (DSO) staff on the same terms and conditions if they win work previously carried out in-house by councils.

Officials at the DoE were pinning their hopes on the European Parliament agreeing to a complete redrafting of article 1.1 of the European Acquired Rights Directive, which is the basis for United Kingdom TUPE legislation.

But now the European Parliament has decided this legislation will not be redrafted after all and, therefore, there will be no grounds to change existing TUPE regulations.

Allan Black, national construction organiser of the GMB, said: If the government does fiddle around with TUPE it will be in direct breach of European law.

The DoE is currently at loggerheads with Oldham Metropolitan Borough Council because the council refused to disclose TUPE information to one potential bidder.

The DoE ruled that the scheme will have to be retendered, with the councils direct services organisation barred from bidding, but it stressed that this was a one-off situation.

Elsewhere, the London Borough of Tower Hamlets is understood to have delayed awarding a general building maintenance job because the only bidder it attracted was the DSO.

Meanwhile, Weymouth and Portland council has just awarded four housing maintenance contracts (together worth 3 million) to its DSO, but did manage to attract six bidders for each job.