Two-tier code scrapped

The two-tier code regulating employee benefits in public sector outsourcing is to be scrapped with immediate effect, the government has announced. It is replacing it with six new — purely voluntary — principles of good employment practice

The code, introduced by Labour in 2003, was intended to protect the pay and conditions of new staff hired by companies who take over public sector contracts, so their benefits were broadly comparable with those received by former public-sector counterparts transferred under transfer of undertakings (TUPE) legislation.

The Cabinet Office claimed that withdrawing the code would open up government procurement and reduce costs by removing barriers for small and medium-sized enterprises (SMEs), charities and social enterprises to provide public services.

Public sector unions reacted angrily. Dave Prentis, general secretary of UNISON, said the code was essential to stop firms that are in the process of bidding for public sector contracts competing on how little they can pay their staff.

"Even many companies that bid for these contracts are privately worried that this will result in a 'race to the bottom' in pay and conditions,” Prentis said. “This move will hit many low-paid women workers hard, particularly catering and cleaning staff.

www.peoplemanagement.co.uk/pm/articles/2010/12/two-tier-code-for-public-sector-outsourcing-scrapped.htm

www.unison.org.uk/asppresspack/pressrelease_view.asp?id=2085