Taking over a workforce after winning a school catering contract is never an easy task. Particularly as the transfer of power often provokes rumour and uncertainty. Siobhan O'Neill examines how to manage the transition
Recruiting new staff can be time consuming but is often exciting, heralding growth within a company. Usually the recruitment process is smooth because the new employee has applied and wants to work for your company and you've selected them as the best applicant. But what if your new staff member is not there of their own volition and didn't have plans to work for you?
This scenario may sound odd, but in contract catering it's not unusual for whole units to be transferred to a new employer when the client switches catering company at the end of a contract. It's particularly common in education settings, and with the public sector continuing to face cuts and catering services increasingly being divested - or outsourced - from local authorities, companies are frequently faced with bringing new staff on board under TUPE regulations.
Transfer of Undertakings (Protection of Employment) Regulations - or TUPE - protects employees' terms and conditions of employment when a business or contract is transferred between companies. Workers automatically become employees of the new company on the same terms and conditions as their previous contract. This includes holidays or benefits connected to their length of service, and any employment issues associated with their previous employer will also transfer. All their rights are protected. If the old company was providing an occupational pension, the new employer is also obliged to offer some form of pension scheme.
For employees, it's essential protection which ensures they don't lose employment when a caterer's contract ends, but for businesses it can be a headache. The legalities can be complex and will need proper examination as part of the due diligence process before going into tender. Occasionally, some aspects of the TUPE agreement may mean a contract is unfeasible.
"If you do your due diligence you should know exactly what you're entering into," says Caterlink managing director Neil Fuller. "When people are providing TUPE information from one employer to another, everything is there in an upfront and professional manner. All catering contracts of employment are fairly similar so you know what the liabilities will be.
"It is slightly different with people transferring from local authority or school employment. It is a question of checking the commercial contract in terms of the liabilities we are expected to take on. On occasion, a local authority might be unrealistic in terms of trying to pass all that risk back to the caterer, and in that case we'd have a dialogue with them before we bid, and on a very seldom occasion we might feel that the risk is disproportionate and then we won't tender."
Steve Quinn, managing director at Cucina, adds that the terms and liabilities are a big deal, especially with pension schemes. "That really dictates whether we can proceed with it or not," he says. "If you've got lots of long-service people nearing retirement we'd probably stay away from it, because the liabilities of doing it are just not worth it when you compare that with the profit and returns that we can make."
Once you've navigated the minefield of a TUPE contract and are set to take over, then begins the tricky task of managing the staff transfer. Communication is key. Rumours flourish in a vacuum and the threat of change will make people feel uncertain about their futures.
"It's the fear of the unknown that we try to prevent," says Fuller. "If you've been working in one school for 15 years and for one employer for maybe 10 of those years, change is hard to take."
"It's such a worrying time for them," agrees Quinn. "Some of them haven't been through a transfer before and what tends to happen is, if you don't fill the silences with reassurance, they believe that they're going to get fired, or their rates of pay or their hours are going to be halved, and the big, bad, new company is going to come in and change their world."
Pauline Vallance, executive human resources manager at Brookwood Partnership, says staff need to be nurtured through the transfer process. "It's wrong to say the stages of change shouldn't be there. It's almost a grieving process," she says. "You've gone through the stages of getting the contract and are already there emotionally, but the employees haven't been through any of it. Some people will embrace change, however, and they will help bring along the others. If you find them and get them on board quickly they will be your ambassadors."
Brookwood has developed a leaflet called "B There For You!" and also offers new staff the Hospitality Action Counselling Helpline service. "We've had feedback on this that employees felt that we were a caring organisation and that the process wasn't going to be as they'd feared," says Vallance.
Brookwood holds informal group sessions to answer staff questions on uniform and pay, and will take staff to visit their other sites. They ensure employees know there is a range of senior staff on hand to help them.
Caterlink appoints "mobilisation managers" who work with the unit and spend time with staff to help bring them into the new organisation. "It's a two-way street, with them learning about Caterlink and us learning about them and their school," says Fuller. They also hold a "Focus on Food" event where they can meet suppliers, see the new menus and taste some of the dishes they'll be preparing.
Caterer Pabulum takes new staff to their own cookery school for a training day. But managing director Nelson Williams warns that not all staff will be on board. "Experience tells you that for every person you can train and develop and get to where you need them to be, there is one that can't," he says. He believes it's especially true in education catering where a staff member may have chosen a job that fits in with their lifestyle, rather than as a career choice.
"You need to manage it," says Williams. "You can win a contract where they've already been through a process of three other partners before, and in each of those instances the team is the same. Unless you do something about that team, you can be pretty damn sure that in three years' time you'll lose the contract."
Quinn agrees but says there is scope to bring people around. "Often you've got disaffected managers transferring over who are quite cynical and were before, which is why the client wasn't happy with the service. So you're left with somebody at the helm that is part of the problem; but they can be part of the solution. You just give somebody a different way of working, you give people the passion back, and you realise that so much of a person's performance is about the job satisfaction and how they're treated."
Fuller says the process needs to be fair but robust to ensure the unit changes in line with the client's expectations. Staff need to be given the opportunity to succeed through training and if necessary counselling, but ultimately subject to disciplinary procedures if they dig their heels in.
Williams adds: "I think companies will have to get more robust in their processes within TUPE. It's not just about taking staff on, it's much more involved, and unless you get them working in the way that you need them to work, then one of the key problems that was there in the beginning will still be there at the end. That's a huge challenge because some people have been embedded in it a long time."
COMMUNICATING WITH THE NEW WORKFORCE
Cucina makes every effort to go in as early as it can to tell the new workforce a little bit about what it does as a company and what TUPE means for them.
"We reassure them that their length of service stays, their pension will be comparable, their rates of pay, their hours of work will be unaltered," explains managing director Steve Quinn. "But in the main, the questions that come out are 'what does my uniform look like?' and 'what day of the month do you pay us?'"
So, to anticipate those kind of questions, Cucina takes examples of uniform in for them to see. Reassurances like that settle everything down, says Quinn. "It's important that they also understand that TUPE doesn't mean nothing will change," he adds. "Invariably something's going to change because our view of what the service needs to be is different to the outgoing caterer. What we always do is share the presentation that helped us win the contract. It's a way of saying 'this is us, this is what we're about'."
10 TIPS FOR MANAGING TUPE
1 Ensure your due diligence is robust so you know what is expected of you in the TUPE process.
2 Make sure you understand your liabilities concerning pensions.
3 Don't forget that there may be staff on long-term sickness, or in dispute with the existing employer, and those issues will transfer as well.
4 Start communicating with staff as early as possible to eliminate rumours.
5 Be honest with staff about expectations of change.
6 Understand that staff need to go through all the steps in the process of change from anger and denial to acceptance.
7 Make it a dialogue. Staff need to feel listened to. They have the best understanding of what works in that kitchen and that school.
8 Realise that the more changes you expect staff to adapt to, the harder it will be. If they are gaining a new unit manager, as well as a new employer and new working practices, the process will take longer.
9 Familiarise staff with the new company via training days, site visits and demonstrations. Be accessible so they can come to you with questions and fears.
10 Don't forget staff transferring out of the company when the situation is reversed. Be supportive until they're with their new employers.
DEALING WITH LONG-SERVING TEAM MEMBERS
Brookwood Partnership managed a recent transition at a school where the catering service had been provided by an in-house team for more than 50 years. This involved transferring staff, many of whom had been part of the team for at least half that period.
The caterer was present at every stage of the takeover, ensuring every employee was constantly communicated with - both individually and as a team.
The team was offered the opportunity to visit another site and talk to other employees to see first hand what it would be like working for a catering company rather than the school.
It gave the team the chance to discuss issues and opportunities with peers as well as the owners of the company.
Additionally, a dedicated helpline was available to answer questions at any stage of the process.