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The UKs department of trade and industry has clarified that the restructured regulation on Transfer of Undertakings (Protection of Employment) is not targeted at outsourcing business to India. It was further cleared that the new regulation applies to functions that are contracted out only when staff from the old enterprise is employed by the new service provider.
Under such circumstances, the new service provider takes on the liabilities that may arise when these staff are made redundant if they are found to have rights that have not been met, an official DTI release has pointed out.
"It is very unlikely that UK employers will shift their employees to India when a business function transfers from UK to India. The most likely situation will be that like UK employees are reassigned by the UK business or agree to be made redundant.
Where, UK employees decide not to transfer their staff, the new employer can opt for his own set of choice, and he is also not required to pay them the rates paid by the earlier employer. In short, Indian employers rarely take on UK employees when a transfer occurs and can hire local employees on new terms and conditions agreed upon.
There is a new contract signed by two independent parties - the Indian BPO company and its UK client," as cited by Chris Sealey from the employment & consumer desk at DTI, London, to ET.
Moreover, the new regulations apply to companies in the UK and any litigation arising out of them will be settled in courts here. Hence, fears of BPO companies in India being hit with a large number of cases by former employees of their clients are also largely baseless," Sealey added.
In its clarification, the DTI further states that there is no shift in UK government policy towards outsourcing and it is no priority list to provide adequate protection for UK employees, who may be affected by this development.
"Many outsourcing arrangements were already covered by the previous edition of TUPE regulations because they are business transfers. It is not correct to read the new regulations that came into force on April 6, 2006, as widening the scope of protectionism towards UK employees affected by outsourcing," Sealey said
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