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Personnel Today

Pension protection under transfers

by Personnel Today 18 Sep 2001
by Personnel Today 18 Sep 2001

The Government has given its strongest indication that staff pensions are to
be protected by law for the first time when employees transfer from one
business to another.

The proposals are part of the Government’s push to convince public sector
staff that it is safe to move to private sector employers, and are outlined in
a long-awaited consultation document on changes to Transfer of Undertakings
Protection of Employment regulations.

Currently pensions are not covered under Tupe, but in practice public-sector
employers have had to ensure private contractors provide staff with similar
pensions.

John McMullen, national head of employment law at Pinsent Curtis Biddle,
said the proposals mean private-sector employees’ pensions will for the first
time be protected when staff transfer.

McMullen, who advises the CBI on Tupe, added, "As a contractor, you
will write the cost of providing a pension scheme into the overall cost.

"What it may mean is that the cost imperative of contracting out may
not be as high as before. You cannot do it much more cheaply because the labour
saving is not there."

The consultation document also includes proposals to make it easier for
employers to change terms and conditions, provided there is an economic,
technical or organisational reason to do so.

But McMullen thinks this proposal is contrary to European case law.

Other plans include consideration of whether Tupe should apply when service
contracts change hands from company to company and greater flexibility over
when the regulations apply to transfers of insolvent businesses.

By Ben Willmott

Personnel Today
Personnel Today

Personnel Today articles are written by an expert team of award-winning journalists who have been covering HR and L&D for many years. Some of our content is attributed to "Personnel Today" for a number of reasons, including: when numerous authors are associated with writing or editing a piece; or when the author is unknown (particularly for older articles).

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