Sun settles with ousted outsourced staff

Sun Microsystems has agreed to pay a group of former employees of reseller Logical in an out-of-court settlement.

The Logical workers were running an on-site IT support service at UBS bank in the City of London as part of an outsourcing deal.

But when Sun Microsystems won the contract in January 2002, it argued that it was not obliged to take the workers on under Transfer of Undertakings, Protection of Employment (TUPE) regulations.

Under TUPE, workers transferred in outsourcing deals are guaranteed the same terms and conditions of employment at their new outsourcer.

Following a year-long legal battle Sun agreed to pay an undisclosed sum to the group of about 10 IT support workers.

A source confirmed: "When Sun took over the deal it would not take over the terms and conditions of the Logical workers under TUPE, and [the matter] went to court."

A Sun spokeswoman said the company was unable to comment on the case for legal reasons. The workers involved agreed to sign a non-disclosure agreement as part of the settlement.

With the growth of outsourcing the issue of transferring staff under TUPE is becoming a consideration in the channel.

Julian Crook, public sector director at outsourcing company ITNET, said the treatment of workers' terms and conditions was an important matter for any company involved in outsourcing arrangements.

He said that half of ITNET's staff - over 1,000 people - had been transferred to the company through TUPE regulations at some time through outsourcing deals.

"We do not have any problems with TUPE regulations because we are geared up to take staff under these regulations," he added.

He said the company supported over 100 different sets of terms and conditions. "This does not cause us any problems because it's part of our business and we have been doing it for 15 years."

But he added that problems could occur as a result of culture differences and diverse employment terms and conditions.