By Jonathan Rayner


A north-west firm is facing an employment lawsuit that could have significant implications for law firms that take over a client account from another practice, the Gazette can exclusively reveal.



The litigation, which is scheduled for an employment tribunal hearing in June, will be the first time a court has ruled on how TUPE (transfer of undertakings, protection of employment) legislation should apply to law firms. It will establish whether or not firms which take over a client from another firm are under an obligation to also take on the staff who were working on the client account.



The issue arose when Southport-based Barnetts won a £1 million Britannia Building Society account from Liverpool firm Lees Lloyd Whitley (LLW). Most of the 23 staff who worked on the account have been reabsorbed into LLW. However, six staff who were not found another position are now bringing a claim for compensation against Barnetts under TUPE legislation. They claim Barnetts was under an obligation to take them on, which is understood to be under dispute.



Gordon Turner, principal at Partners Law in Essex, who is acting for the six employees, said the case was mapping uncharted waters around TUPE, in particular where it applies to contracts won in tenders.



Dr John McMullan, head of employment law at north-east and London firm Watson Burton, said this was the first time a TUPE case involving the transfer of a contract between law firms had been heard in England and Wales.



LLW managing partner Graham Smith said the firm identified TUPE as a key issue when transferring the account. 'We consulted extensively with staff to examine ways of redeploying the 23-strong department that dealt with the Britannia work. We were able to find positions for all but six of them.'



Barnetts said it would not be providing any comment. Britannia Building Society declined to comment.