Pickles announces withdrawal of ‘two-tier’ code
Communities secretary Eric Pickles has announced that the local government ‘two tier code’, which currently protec
ts the terms and conditions of staff transferred to firms operating outsourced contracts, is to be scrapped.
In a speech to the CBI, Mr Pickles said the withdrawal of the code formed part of the coalition’s plan to slash red tape and widen the market for public services provision.
Ahead of the Government Budget, Mr Pickles said: “I can reveal I am scrapping the Local Authority Two-Tier Code introduced by the [former] Office of the Deputy Prime Minister. Where councils outsource functions, it requires private firms who then hire new workers to employ them on the same terms as the former public sector workers who transferred across. This is bonkers – it increases the costs to the taxpayer of providing public services, and it actively discourages the creation of new jobs.”
Cabinet Office minister Francis Maude announced recently plans to end the wider public services two-tier code, but there had been some confusion as to whether the coalition’s initiative would extend to the local government sector.
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Excellent news for new contract providers, We are a registered charity, and ‘outcome focused’.
We believe staff should be paid for what they do. Due to the historic legislation, under TUPE, we have brought staff in that are on higher salaries than our existing staff who work exceptioanally hard and they work for us in the substance misuse field, because they belief in what they do, not what they earn.
Be careful not to confuse the ‘two-tier’code with TUPE requirements which are legal obligations.
The ending of the two tier code (which in fact was announced on 12th Dec 2010) has no effect on the terms and conditions of those staff who are transferred from a public authority to a private sector organisation – they retain their T & Cs unless the receiving organisation seeks to remove them for Organisational, Technical or Economic reasons – actions which effected employees often to take to Employment Appeal Tribunals for scrutiny.
Does anybody know how/when this will be introduced? Govt procurement processes have a very long lead in process and we are just about to submit (in next week) one tender that has been declared that has a existing workforce (ie TUPE implications) and expect to be completing another in about 2 months time which again has an exsting workforce?
As with Jackie – we are also undertaking procurement where TUPE implications apply so an indication of when this is likely to be implemented would be helpful. The “how” is also an interesting question – is this announcement likely to say that the T&C’s of existing local govt employees won’t be transferrable if the service is transferred? Whilst this “protection” of employees is always welcome (if you’re one of the staff involved) – it does create a huge headache when tendering or outsourcing services and the private sector in particular find it a barrier to securing new work.