Public sector staff being transferred to the private sector will have their
terms and conditions – including pensions – protected by law for the first time
from next month.
The draft code of practice on local government transfers, which has just
closed for consultation. It is expected to become legally binding by the end of
October, requires private sector contractors to provide newly recruited staff
transferred from the public sector with similar terms and conditions to their
The code is designed to allay the fears of unions, which, at the TUC annual
conference last week, adopted a motion calling for a halt to further public
private partnerships (PPP) because of concerns that they create a two-tier
workforce without improving services.
Mary Mallett, deputy vice-president for local government HR body Socpo,
believes the code will ensure more effective and fairer transfers of staff from
the public to the private sector.
"In many ways the code is what many organisations with good personnel
practices have already been following," she said.
John McMullen, head of employment law at Pinsent Curtis Biddle, said the
code, which will be enforced by district auditors, will have a significant
impact on employers that have been able to negotiate flexible agreements on
staff transfers until now.
The code has not been welcomed by private sector contractors according to
Emma Burrows, head of employment group for Trowers and Hamlins. She said many
of her private sector clients would think twice before entering into PPP
because of the massive increase in staffing costs they would face.
"Private companies could be deterred from bidding for PPP contracts in
the future. They could see their employment costs soar as they are forced to
pay new staff comparable rates to their former local authority employers,"
The Government is planning to announce new Transfer of Undertakings
(Protection of Employment) regulations early in 2003 following a drawn-out
By Ben Willmott
Pilot scheme may spark tribunal claim surge
The Government’s Retention of
Employment (REM) pilot scheme for transferring staff from the NHS to the
private sector could lead to a rash of employment tribunal claims.
This is the view of Amanda McGurran, of law firm Shadbolt &
Co, which was involved in staff transfers at three of the four hospitals
piloting the REM scheme.
Under the initiative, managers and supervisors transfer to the
private sector employer. Under TUPE regulations managers and supervisors
transfer to the private sector employer, while non-managerial staff remain as
NHS employees and are seconded.
McGurran believes seconded staff could successfully claim at
tribunal that the service provider is, in fact, their employer, and could claim
for constructive dismissal if their duties or conditions change substantially.
Keith Johnston, HR director for North Bristol NHS Trust,
supports REM in principle, but has concerns over how it will work in practice.