Abolition of the two-tier codes

TUPE protection applies only to protect the existing terms and conditions of transferring staff. It does not affect the terms and conditions of new employees who join the transferee after the transfer.

One of the earliest acts of the coalition government was to scrap the “two tier codes” for central government (the Code of Practice in workforce matters in public sector service contracts) and local government (the Code of practice on workforce matters in local authority service contracts).

These Codes aimed to prevent the development of a two-tier workforce as a result of public sector outsourcing by deterring employers from taking on new recruits on less favourable terms.

The central government Code was replaced by 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.”