Public and Commercial Services Union

In March 2005 Prime Minister Blair announced the Code of Practice on Workforce Matters in Public Service Contracts (also known as the Two –Tier Workforce Code).

The Code is designed to prevent the emergence of a two-tier workforce when public sector employees are contracted out to a new service provider, ensuring that new recruits (i.e. those employed directly by the contactor after they have taken on outsourced staff) receive comparable treatment to the transferred staff, whose terms and conditions are protected by the TUPE Regulations.

Under the Code, employers are be obliged to give new employees an overall comparable packages to that received by the outsourced staff, i.e. the package may not be the literal same salary but it should be broadly comparable, and should include similar terms and conditions such as flexible working, leave, family friendly policies, etc (although pensions are not included, and can not be used for comparative purposes).

Subsequently the Cabinet Office (in conjunction with civil service trade unions, Government Departments, contractors and ACAS) produced a Code of Practice to assist with implementing the Agreement, including application of an Alternative Dispute Resolution Code, aimed at maximising its effectiveness. The Code applies to every outsourcing – except trading funds - after 18 March 2006. A copy can be found on the Cabinet Office website.

The TTWF Code and its accompanying procedures are useful tools for PCS representatives to employ when dealing with privatisation and outsourcing proposals.

Private companies bidding for outsourced work should provide detailed information as part of the bidding process explaining the steps they will take to ensure full compliance with the Code, including future monitoring arrangements.

Unfortunately. Government commitment to the monitoring and enforcement of the Code has not been forthcoming.

A UNISON analysis of the effects of the TTWF Code found that “The Government has not studied the impact of contracting out on the workforce nor evaluated the success of the protections it has put in place and its procurement arm is in denial about the very existence of the Codes”.

This lack of government commitment to its own Code is not altogether surprising, and makes union efforts to enforce it problematic.

Nevertheless, the Code can be still be useful if PCS representatives can persuade the Department and the private company to comply with it.