Public service trade unions have accepted a compromise on the protection of workers who join companies or voluntary sector bodies undertaking public sector work. The CBI wanted freedom for companies taking on work from the public sector to set reward packages for newly recruited staff. The trade unions wanted staff to be protected by law. The compromise is that a Code of Practice will specify the level of protection and local councils will have to include the Code in future contracts. The agreement will also apply to police authorities and fire and civil defence authorities.The Code will ensure that new joiners will be offered terms and conditions which are no less favourable than those of transferred employees, but this does not mean the terms have to be the same. The agreement does not apply to pensions but under the Code new joiners will also be offered a reasonable pension provision, which may be either membership of the Local Government Pension Scheme, membership of a good quality employer pension scheme or membership of a stakeholder pension scheme with an employer contribution.
Contractors will be also be required under the Code to confirm their obligations to protect the terms and conditions of transferring local government employees, including the right to ongoing access to the LG Pension Scheme or to an alternative good quality occupational pension scheme.
The Code will set out principles to be applied in service contracts which involve a transfer of staff from a local authority to a service provider or on a re-tender of such a contract. It will not apply retrospectively.
The effect of the Code will be that it will prevent good contractors with high quality employment standards from being undercut by those willing to abuse the system. And it will remove the risk that service quality is undermined during the life of the contract by a provider who is willing to drive down staff terms and conditions.