Gardner Merchant backs out after redundancy row

Gardner Merchant Education has pulled out of a deal to provide school meals across West Sussex because it could not agree who should pick up the bill for dinner ladies being made redundant.

School meals in the county are currently provided by rival Castle View, but Gardner Merchant won the contract earlier this year. The service at primary schools was to switch from hot meals to packed lunches when the new contract started this autumn. This would have meant lay-offs among the 700-plus school catering staff.

A council spokeswoman said Gardner Merchant had been unable to "agree a way forward" with Castle View. The disagreement concerned transfer of undertakings rules, known as TUPE, which are meant to protect staff terms and conditions.

Liz Davidson, human resources director at Castle View, said: "The contract was up for retender in the normal fashion. We submitted a bid, were told we had been unsuccessful and that the contract had been awarded to Gardner Merchant under TUPE."

At a meeting with Gardner Merchant to discuss the transfer, Davidson said she was suddenly asked why Castle View thought TUPE applied. "We didn't think it was an issue because it was bid under TUPE and awarded under TUPE," she said.

Davidson added: "Gardner Merchant indicated they wanted Castle View to give notice to dismiss the staff. But under TUPE that would automatically be unfair. Because we were not willing to terminate people's employment, the council said they were abandoning the previous process and putting the contract out to tender again."

The redundancy bill involved could be as high as £400,000, Davidson said. "All the major contractors have adhered to TUPE over the past five years."

Gardner Merchant declined to comment. by David Shrimpton