Indemnity Spotlight – "Wrong Pocket" Provision

On any TUPE transfer, one of the major TUPE risks for the transferee will be inheriting additional staff who had not been envisaged as transferring and, therefore, who have not been budgeted for.

The best way to cover off this risk is through an agreed list of Transferring Employees, coupled with a "wrong pocket" provision. This is a provision that, if any staff transfer across, other than the listed "Transferring Employees" (as defined), the transferee, having given the transferor, an opportunity to re-employ, is entitled to dismiss and to be fully indemnified against its costs of employing and dismissing such staff. An alternative is to merely include definitions for "Retained Employees" (staff to be retained by the transferor) and "Former Employees", (former employees of the transferor) and to include an indemnity against any claims from them.