As the TUPE alterations finally get under way, it seems the changes are set to create a two-tier TUPE system that favours the transfer of ex-public sector employees
The week ending 14 February 2003 was a (relatively) exciting one for TUPE anoraks. The TUPE reform is finally moving on. The Government has been considering the alteration of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE) for several years, but its last consultation on the subject ended in December 2001 and nothing has been heard on the matter since.
The DTI's snail-like progression towards reform has been accelerated by public sector union pressure. On 13 February, the Deputy Prime Minister's office announced that in April, certain public sector staff would receive immediate better treatment on TUPE transfers ahead of any other sector.
Added to the Cabinet Office Statement of Practice 2000 (which obliges central government and the NHS to apply TUPE unless there are exceptional circumstances) and section 38 of the Employment Relations Act 1999 (which allows the Secretary of State to deem transactions that would not be transfers under community law, to enjoy the protection of TUPE), the Government has now approved its Code of Practice on workforce matters in local government.
Unexpectedly, it assumes the application of TUPE on local government contracting. But controversially, it goes further, and deals with the so-called 'two-tier workforce' problem. It will oblige contractors for public services from local government to apply TUPE not only to transferring staff, but also to recruits hired after the transfer.
Finally, employees must be offered a reasonable pension provision. This may be membership of the local government pension scheme, membership of a good quality employer pension scheme, or membership of a stakeholder pension scheme with a contribution from the employer.
The code will be enforced by a contract clause between the local authority and the contractor.
On 14 February, the Secretary of State Patricia Hewitt declared that TUPE would be the subject of further consultation and draft revised regulations "in the first half of this year". These are to be put before Parliament in the autumn and come into force in Spring 2004.
The reforms will include the application of TUPE more comprehensively to service contract operations (although the press relea