Return of the two-tier workforce

TUPE only protects the terms and conditions of transferring employees, not those of new joiners who arrive after the transfer date.

Previously, Codes of Practice for central and local government in England and Wales aimed to prevent the growth of a two-tier workforce as a consequence of public service outsourcing. They did this by deterring employers from taking on new external recruits on less favourable terms than those of existing employees who had transferred from the public sector.

The coalition government replaced the central government two-tier code with a set of six “principles of good employment practice for government, contracting authorities and suppliers”. The third principle states: “Where a supplier employs new entrants that sit alongside former public sector workers, new entrants should have fair and reasonable pay, terms and conditions. Suppliers should consult with their recognised trade unions on the terms and conditions to be offered to new entrants.”

In Wales, the Welsh Government introduced its own code — the Code of Practice on Workforce Matters. There are also model contract terms and conditions and a Procurement Advice Note, available from the website of the Welsh Government.

In Scotland, the Scottish Executive and the Scottish TUC agreed an “employment protocol” for “public private partnerships”, similar to the former Codes.