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. 




One of the first acts of the Conservative-led coalition government was to abolish 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) in England and Wales. These Codes 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.” As a consequence, the two-tier workforce is now returning across the economy (see for example, TUC research, The decent jobs deficit — the human cost of zero hours working and casual labour, December 2014).


In Wales, the Welsh Government introduced its own two-tier Code in June 2014 — 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” in Scotland, similar to the former Codes.