Lewis Silkin Seminar - Warranties and Indemnities - 8th March 2012


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This is the first presentation from Lewis Silkin's recent "Warranties and Indemnities" seminar on the 8th March 2012 by Julian Parry and Lucy Lewis.

You can view the case study slides here: http://www.slideshare.net/LewisSilkin/lewis-silkin-whats-trending-in-tupe

If you would like more information please get in touch.


Julian Parry

Lucy Lewis

Published in: Business, Economy & Finance
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Lewis Silkin Seminar - Warranties and Indemnities - 8th March 2012

  1. 1. Warranties and Indemnities – What to Look Out For Julian Parry and Lucy Lewis Lewis Silkin LLP 8 March 2012
  2. 2. Scenarios Business sale and purchase Outsourcing – first time Second generation outsourcing Taking a service back in house
  3. 3. What role does your business play? Seller S ll Purchaser Client New service provider Replacement service provider
  4. 4. What should you be considering? Commercial position Contractual position Legal position Do you understand the liabilities, liabilities obligations to inform proposed agreement (BPA, and consult and provide services agreement)? information Due diligence Buyer/transferee beware!
  5. 5. What to cover in the agreement TUPE on commencement What happens to unidentified Controls on assignment employees of staff during agreement/notice period What happens to TUPE on employees identified termination of services
  6. 6. Understanding liability under TUPE Transferring employees Liability for existing claims transfers to transferee Liability for not taking on or dismissing without ETO Automatic unfair dismissal for transferee (includes dismissals by transferor) Information and consultation obligations Joint and several liability (13 weeks pay per affected employee) weeks’ Liability for employee liability information y p y y £500 + per employee for transferor
  7. 7. Turning back the tide!
  8. 8. “Standard” commercial position Standard (If there is such a thing!) alters TUPE as follows: th i h thi !) lt f ll Seller/Client: Buyer/Supplier: Pays salary/ Indemnifies benefits to buyer/supplier y pp Indemnifies Pays salary/ ays sa a y/ transferring on seller/client on benefits to TEs employees commencement commencement from transfer (TEs) up to for TEs pre- for TEs claims date transfer date transfer claims from transfer
  9. 9. Standard Standard” commercial positionOn termination of agreement supplier employees may agreement,TUPE to new supplier or client (if service taken in house). Supplier will: Client will: Agree to pay Indemnify (or procure Indemnify y Agree to pay client/replacement new supplier against claims employees to supplier for claims pays) arising from termination arising from employees termination date employees to from date termination date termination date
  10. 10. “Standard” commercial position Standard Parties will comply with information and consultation obligations under TUPE (and on termination the client will procure that the new supplier complies)Indemnify the other for failures on their part leading to claims p g Normally an indemnity for y y (and client to indemnify for failure by transferor to provide failures by replacement employee liability information supplier)
  11. 11. Other considerations As few TUPE Ability to control liabilities as numbers of service possible provider’s staff on services i C e Client wants Service provider not to Ready access to dump staff into services (extended) employee or dismiss or change information, for re- their terms in run up to tenders termination
  12. 12. Other considerations Cover for pre- Clarity Cl it on whoh existing claims is inherited “strays” Non-solicitation of its (key) staff Service Participation by li t? b client? provider consultation prior to transfer wants As much control Contribution to as possible about the costs of who it assigns to redundancies the services
  13. 13. Case Study
  14. 14. Case study Want t W t to avoidid Cleaning Lost Gateshead taking on NUTS Bank so don’t 12 cleaners need more employees with employees good 1 janitor p y pay/benefits Good pay and benefits NUTS SCAM Maintenance Security: NUTS don’t want Contractors “as Group Poor and when” when Group Poor p(untrustworthy) employees to transfer
  15. 15. Thank you