Messages are mixed on transfer rights

A leaked Cabinet Office memo suggests that the government may not deliver on promises of greater protection for public sector workers transfered to the private sector. However, at the end of last month it emerged that a new agreement was likely in the health sector that would ensure ancillary workers affected by private finance initiative projects would remain covered by NHS conditions (see page 25).

The memo admits that contracting-out has led to job cuts and that new recruits are being offered lower rates of pay. However, it recommends that the proposed changes to the law should be abandoned "in order to keep business on board" and that a voluntary code of practice to ensure "fair and reasonable" terms would be enough.

Last year the government issued a consultation document looking at how public sector workers and particularly their pension rights, could be better protected when their work was transferred to the private sector. In particular, it considered how pension rights could be protected. A commitment to improve the rights of transferred workers was seen as crucial to the government's promotion of greater use of public/private partnerships.

Unions had also been demanding that new workers taken on after a transfer should be treated no less favourably. At last year's TUC conference Patricia Hewitt, the secretary of state for trade and industry, stated "workers need reassurance that their rights will be safeguarded in the vital process of public sector reform and in business restructuring in the private sector."