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Defence Reform BillPage 30

46 Payments to employers etc of members of reserve forces

(1) In Part 8 of the Reserve Forces Act 1996 (schemes for exemption and financial
assistance), after section 84 insert—

84A Other payments to employers etc of members of reserve forces

(1) 5The Secretary of State may by regulations provide for the making of
payments by the Secretary of State to—

(a) an employer whose employee is undertaking relevant reserve
force activities or has undertaken such activities while
employed by the employer, and

(b) 10a person carrying on business in partnership whose partner in
the business is undertaking relevant reserve force activities or
has undertaken such activities while a partner of the person,

but see subsections (3) to (5).

(2) For the purposes of this section, a person undertakes relevant reserve
15force activities when the person—

(a) is in permanent service under Part 4 or under a call-out order,

(b) undertakes training of a prescribed description while an
ordinary member of a reserve force, or

(c) performs other voluntary duties of a prescribed description
20while an ordinary member of a reserve force.

(3) The Secretary of State may make regulations under this section only if
satisfied that the payments provided for, or such payments taken
together with other measures, are likely to encourage persons—

(a) to employ, or continue to employ, members of the reserve
25forces, or

(b) to carry on business, or continue to carry on business, in
partnership with members of the reserve forces.

(4) Regulations under subsection (1)(a) may provide for the making of
payments to employers who are self-employed, but not in respect of
30their own relevant reserve force activities.

(5) Regulations under this section may not provide for the making of
payments to be conditional on a financial loss suffered by the employer
or the person carrying on business in partnership.

(6) A person making a claim under regulations under this section who is
35dissatisfied with the determination of the claim may appeal against the
determination to a reserve forces appeal tribunal.

(7) In this section—

(2) 45Schedule 7 contains supplementary provision.

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47 Unfair dismissal of reserve forces: no qualifying period of employment

(1) The Employment Rights Act 1996 is amended as follows.

(2) In section 108 (unfair dismissal: qualifying period of employment) at the end
insert—

(5) 5Subsection (1) does not apply if the reason (or, if more than one, the
principal reason) for the dismissal is, or is connected with, the
employee’s membership of a reserve force (as defined in section 374 of
the Armed Forces Act 2006).

(3) In section 192(2)(e) (armed forces), after “104C” insert “, 108(5)”.

(4) 10The amendment made by subsection (2) applies only where, in relation to the
employee, the effective date of termination (as defined in section 97 of the
Employment Rights Act 1996) falls on or after the day on which this section
comes into force.

Part 4 15Final provisions

48 Extent

(1) This Act extends to England and Wales, Scotland and Northern Ireland
(subject to subsection (2)).

(2) The amendments and repeals made by Part 3 have the same extent as the
20provisions amended or repealed (ignoring extent by virtue of an Order in
Council).

(3) The power conferred by section 158(3) of the Reserve Forces Act 1980 (power
to extend to Isle of Man) is exercisable in relation to the amendments of that Act
made by section 44.

(4) 25The power conferred by section 132(3) of the Reserve Forces Act 1996 (power
to extend to Channel Islands and Isle of Man) is exercisable in relation to any
amendment of that Act that is made by this Act.

(5) The power conferred by section 384(1) of the Armed Forces Act 2006 (power to
extend to Channel Islands) is exercisable in relation to the amendments of that
30Act made by section 44.

49 Commencement

(1) Parts 1 to 3 come into force on such day or days as the Secretary of State may
by order made by statutory instrument appoint.

(2) An order under subsection (1) may appoint different days for different
35purposes.

(3) This Part comes into force on the day on which this Act is passed.

(4) The Secretary of State may by order made by statutory instrument make
transitional, transitory or saving provision in connection with the coming into
force of any provision of this Act.

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(5) An order under subsection (4) may make different provision for different
purposes.

50 Short title

This Act may be cited as the Defence Reform Act 2013.

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SCHEDULES

Section 4

SCHEDULE 1 Exemptions relating to premises used by a contractor

Introduction

1 5In this Schedule—

Landlord and Tenant Act 1954 (c. 56)1954 (c. 56)

2 Part 2 of the Landlord and Tenant Act 1954 (security of tenure for business
15and other tenants) does not apply to—

(a) any tenancy granted by the Secretary of State to a contractor in
respect of any land in relevant premises, or

(b) any sub-tenancy of the whole or part of the land comprised in such a
tenancy or in a sub-tenancy to which this sub-paragraph applies.

20Nuclear Installations Act 1965 (c. 57)1965 (c. 57)

3 (1) For the purposes of sections 1 and 2 of the Nuclear Installations Act 1965
(restriction of certain installations to licensed sites and prohibition of certain
operations), any site in designated premises is to be treated as a site used by
a government department.

(2) 25Sub-paragraph (3) applies if a contractor uses any site in designated
premises for a purpose which, if section 1 of that Act applied to the
contractor in relation to the site, would require the authority of a nuclear site
licence.

(3) The provisions of that Act other than sections 1 to 6 and 22 have effect as if—

(a) 30the contractor were the licensee under a nuclear site licence in respect
of the site, and

(b) any reference to the period of the licensee’s responsibility were a
reference to any period during which the contractor occupies the site.

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Health and Safety at Work etc Act 1974 (c. 37)1974 (c. 37)

4 (1) The Secretary of State may by order exempt a contractor, in relation to
relevant premises or activities carried on by a contractor at relevant
premises, from any of the following—

(a) 5sections 21 to 25 of the Health and Safety at Work etc Act 1974;

(b) any other provision of Part 1 of that Act apart from sections 33 to 42;

(c) any provision of regulations made under that Part.

(2) But an exemption may be conferred by virtue of sub-paragraph (1)(b) or (c)
only if, and to the extent that, it appears to the Secretary of State necessary
10or expedient to do so in the interests of the safety of the State.

(3) An exemption conferred by virtue of sub-paragraph (1)

(a) may have effect generally or only in particular respects;

(b) may be expressed as having effect in relation to premises for the time
being specified in the order.

15Radioactive Substances Act 1993 (c. 12)1993 (c. 12)

5 The Radioactive Substances Act 1993 has effect, in relation to designated
premises and a contractor, as if the designated premises were occupied by
the contractor on behalf of the Crown for the purposes of the department of
the Secretary of State having responsibility for defence.

20Environmental Permitting (England and Wales) Regulations 2010 (S.I. 2010/675S.I. 2010/675)

6 The Environmental Permitting (England and Wales) Regulations 2010 have
effect, in relation to designated premises and a contractor, as if the
designated premises were used or occupied by the contractor on behalf of
the Crown for the purposes of the department of the Secretary of State
25having responsibility for defence.

Power to create other exemptions

7 (1) The Secretary of State may by order provide for exemptions for a contractor,
in relation to relevant premises or activities carried on by a contractor at
relevant premises, from any provision of subordinate legislation.

(2) 30An order under this paragraph may confer an exemption only if the
exemption corresponds or is similar to an exemption for, or immunity of, the
Crown.

(3) An exemption conferred by virtue of sub-paragraph (1)

(a) may have effect generally or only in particular respects;

(b) 35may be expressed as having effect in relation to premises for the time
being specified in the order.

(4) In this paragraph “subordinate legislation” has the same meaning as in the
Interpretation Act 1978 (see section 21(1) of that Act).

Orders under this Schedule

8 (1) 40Orders under this Schedule are to be made by statutory instrument.

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(2) A statutory instrument containing an order under this Schedule is subject to
annulment in pursuance of a resolution of either House of Parliament.

Section 7

SCHEDULE 2 Restrictions on disclosure or use of information

5Introduction

1 (1) This Schedule applies where the disclosure or use of relevant information is
restricted by an obligation of confidence.

(2) In this Schedule, “relevant information” means information obtained by the
Secretary of State (whether before or after the coming into force of this
10Schedule) under or in connection with a relevant contract.

(3) “Relevant contract” means a contract entered into by the Secretary of State at
any time before the vesting date for the purposes of defence procurement.

Disclosure between the parties etc

2 (1) The obligation does not prevent or penalise the disclosure of relevant
15information—

(a) between the Secretary of State or an authorised officer of the
Secretary of State and a contractor or an employee of or service
provider to a contractor,

(b) between a contractor and an employee of or service provider to the
20contractor, between one such employee and another, between one
such service provider and another or between one such employee
and one such service provider, or

(c) between a contractor or an employee of or service provider to the
contractor and another contractor or an employee of or service
25provider to the other contractor,

if the disclosure is necessary or expedient for the purposes of arrangements
mentioned in section 1.

(2) The obligation does not prevent or penalise the disclosure of relevant
information—

(a) 30by a former contractor or an employee of or service provider to a
former contractor to the Secretary of State or an authorised officer of
the Secretary of State,

(b) by a former contractor or an employee of or service provider to a
former contractor to a contractor or an employee of or service
35provider to a contractor, or

(c) between a former contractor and an employee of or service provider
to the former contractor, between one such employee and another,
between one such service provider and another or between one such
employee and one such service provider,

40if the disclosure is necessary or expedient for the purposes of arrangements
mentioned in section 1.

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(3) The obligation does not prevent or penalise the use of relevant information
disclosed to a contractor or an employee of or service provider to a
contractor under this paragraph if—

(a) the information is used by the contractor or the employee or service
5provider for any purpose for which the Secretary of State could have
used the information, and

(b) the use of the information is necessary or expedient for the purposes
of arrangements mentioned in section 1.

Disclosure and use for audit purposes

3 (1) 10The obligation does not prevent or penalise the disclosure of relevant
information by a contractor or an employee of or service provider to a
contractor, or the use of that information by the person to whom it is
disclosed, if—

(a) the disclosure is to the Comptroller and Auditor General, or a person
15exercising an audit function of the Comptroller’s, and the
information could lawfully be disclosed to the Comptroller or that
person by the Secretary of State, or

(b) the disclosure is to an accounting officer, or a person exercising an
audit function of the officer’s, and the information could lawfully be
20disclosed to that officer or person by the Secretary of State.

(2) In this paragraph—

Unauthorised disclosure of information

4 (1) This paragraph applies where—

(a) 30information is disclosed to a person in accordance with paragraph 2
or 3 (“the original disclosure”), and

(b) that person, or any other person to whom the information is
subsequently so disclosed, discloses the information otherwise than
in accordance with paragraph 2 or 3 (“the unauthorised disclosure”).

(2) 35The person making the unauthorised disclosure is to be treated for all
purposes as if that person were subject to the obligation which restricted the
original disclosure.

(3) But where the person making the unauthorised disclosure is an employee,
the information is to be treated as if it had been disclosed by the person’s
40employer.

Unauthorised use of information

5 (1) This paragraph applies where—

(a) information is disclosed in accordance with paragraph 2 to a person
other than the Secretary of State or an authorised officer of the
45Secretary of State, and

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(b) the information is used by that person otherwise than in accordance
with paragraph 2(3) (“the unauthorised use”).

(2) The person making the unauthorised use is to be treated for all purposes as
if that person were subject to the obligation which restricted the use of the
5information by the Secretary of State.

(3) But where the person making the unauthorised use is an employee, the
information is to be treated as if it had been used by the person’s employer.

Interpretation: general

6 In this Schedule—

Section 10

25SCHEDULE 3 Transfer schemes under section 10

Transfer of property, rights and liabilities

1 (1) On the transfer date, the designated property, rights and liabilities that are
to be transferred from the transferor to the transferee are transferred and
30vest in accordance with the transfer scheme.

(2) The rights and liabilities that may be transferred by a transfer scheme
include those arising under or in connection with a contract of employment.

(3) A certificate by the Secretary of State that anything specified in the certificate
has vested in a person by virtue of a transfer scheme is conclusive evidence
35of that fact for all purposes.

Provision that may be made by a transfer scheme

2 (1) A transfer scheme may make provision—

(a) for anything done by or in relation to the transferor in connection
with any property, rights or liabilities transferred by the scheme to
40be treated as done, or to be continued, by or in relation to the
transferee;

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(b) for references to the transferor in any agreement (whether written or
not), instrument or other document relating to any property, rights
or liabilities transferred by the scheme to be treated as references to
the transferee;

(c) 5about the continuation of legal proceedings;

(d) for transferring property, rights or liabilities which could not
otherwise be transferred or assigned;

(e) for transferring property, rights and liabilities irrespective of any
requirement for consent which would otherwise apply;

(f) 10for preventing a right of pre-emption, right of reverter, right of
forfeiture, right to compensation or other similar right from arising
or becoming exercisable as a result of the transfer of property, rights
or liabilities;

(g) for dispensing with any formality in relation to the transfer of
15property, rights or liabilities by the scheme;

(h) for transferring property acquired, or rights or liabilities arising,
after the scheme is made but before it takes effect;

(i) for apportioning property, rights or liabilities;

(j) for creating rights, or imposing liabilities, in connection with
20property, rights or liabilities transferred by the scheme;

(k) for requiring the transferee to enter into any agreement of any kind,
or for a purpose, specified in or determined in accordance with the
scheme;

(l) which is the same as or similar to that made by the TUPE regulations,
25in a case where those regulations do not apply in relation to the
transfer.

(2) Sub-paragraph (1)(b) does not apply to references in primary legislation or
subordinate legislation.

Compensation

3 30A transfer scheme may contain provision for the payment of compensation
by the Secretary of State to any person whose interests are adversely affected
by it.

Foreign property

4 (1) Where a transfer scheme transfers foreign property or a foreign right or
35liability, the transferor and the transferee must take all necessary steps to
ensure that the vesting of the foreign property, right or liability in the
transferee by this Schedule is effective under the applicable foreign law.

(2) Until the vesting of the foreign property, right or liability is effective under
the applicable foreign law, the transferor must—

(a) 40hold the property or right for the benefit of the transferee, or

(b) discharge the liability on behalf of the transferee.

(3) Nothing in sub-paragraph (1) or (2) prejudices the effect under the law of a
part of the United Kingdom of the vesting of any foreign property, right or
liability in the transferee in accordance with a transfer scheme.

(4) 45Where—

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(a) any foreign property, right or liability is acquired or incurred by the
transferor in respect of any other property, right or liability, and

(b) by virtue of this paragraph, the transferor holds the other property
or right for the benefit of another person or is required to discharge
5the liability on behalf of another person,

the property, right or liability acquired or incurred immediately becomes the
property, right or liability of that other person.

(5) Sub-paragraphs (1) to (4) have effect in relation to foreign property, rights or
liabilities transferred to a person under sub-paragraph (4) as they have effect
10in relation to property, rights or liabilities transferred in accordance with a
transfer scheme.

(6) References in this paragraph to foreign property, or to a foreign right or
liability, are references to any property, right or liability as respects which an
issue arising in any proceedings would be determined (in accordance with
15the rules of private international law) by reference to the law of a country or
territory outside the United Kingdom.

(7) Expenses incurred by a transferor under this paragraph must be met by the
transferee.

(8) An obligation imposed under this paragraph in relation to property, rights
20or liabilities is enforceable as if contained in a contract between the
transferor and the transferee.

Incidental etc provision

5 A transfer scheme may—

(a) include incidental, supplementary and consequential provision;

(b) 25make transitory or transitional provision or savings;

(c) make different provision for different purposes;

(d) make provision subject to exceptions.

Modification of transfer schemes

6 (1) The Secretary of State may modify a transfer scheme.

(2) 30But if a transfer under the scheme has taken effect, any modification that
relates to the transfer may be made only with the agreement of the person
affected by the modification.

(3) A modification takes effect from a date specified by the Secretary of State
(which may be the date the original scheme came into effect).

35Interpretation etc

7 In this Schedule—

Section 13

SCHEDULE 4 15Single Source Regulations Office

Membership

1 (1) The SSRO is to consist of the following members—

(a) a chair appointed by the Secretary of State,

(b) at least two other members so appointed, and

(c) 20a chief executive, a chief operating officer and other members
appointed in accordance with paragraph 2.

(2) The number of executive members must be less than the number of non-
executive members.

(3) In this Schedule—

(a) 25references to “non-executive members” of the SSRO are to the
members mentioned in sub-paragraph (1)(a) and (b), and

(b) references to “executive members” of the SSRO are to the chief
executive, the chief operating officer and the other members
mentioned in sub-paragraph (1)(c).

30Executive members: appointment and status

2 (1) The executive members of the SSRO are to be appointed by the non-
executive members.

(2) A person may not be appointed as an executive member without the consent
of the Secretary of State.

(3) 35The executive members are to be employees of the SSRO.

Non-executive members: tenure

3 (1) A person holds and vacates office as a non-executive member of the SSRO in
accordance with the terms and conditions of his or her appointment.

(2) Appointment as a member of the SSRO is for a term of—

(a) 40not less than three years, and

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(b) not more than six years.

(3) A person may at any time resign from office as a non-executive member by
giving notice to the Secretary of State.

(4) The Secretary of State may at any time remove a member from office on any
5of the following grounds—

(a) incapacity;

(b) misconduct (which may include breach of a term or condition of the
member’s appointment);

(c) failure to carry out his or her duties.

(5) 10The Secretary of State may suspend a person from office as a non-executive
member if it appears to the Secretary of State that there are or may be
grounds to remove the person from office under sub-paragraph (4).

(6) A person who ceases to be a non-executive member is eligible for
reappointment.

15Suspension from office

4 (1) This paragraph applies where a person is suspended under paragraph 3(5).

(2) The Secretary of State must give notice of the decision to the person; and the
suspension takes effect on receipt by the person of the notice.

(3) The notice may be—

(a) 20delivered in person (in which case, the person is taken to receive it
when it is delivered), or

(b) sent by first-class post to the person’s last known address (in which
case, the person is taken to receive it on the third day after the day on
which it is posted).

(4) 25The initial period of suspension must not exceed six months.

(5) The Secretary of State may at any time review the suspension.

(6) The Secretary of State—

(a) must review the suspension if requested in writing by the person to
do so, but

(b) 30need not review the suspension less than three months after the
beginning of the initial period of suspension.

(7) Following a review during a period of suspension, the Secretary of State
may—

(a) revoke the suspension, or

(b) 35suspend the person for another period of not more than six months
from the expiry of the current period.

(8) The Secretary of State must revoke the suspension if the Secretary of State
decides—

(a) that there are no grounds to remove the person from office under
40paragraph 3(4), or

(b) that there are grounds to do so but does not remove the person from
office under that provision.

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5 (1) Where a person is suspended from office as the chair under paragraph 3(5),
the Secretary of State may appoint a non-executive member as interim chair
to exercise the chair’s functions.

(2) Appointment as interim chair is for a term not exceeding the shorter of—

(a) 5the period ending with either—

(i) the appointment of a new chair, or

(ii) the revocation or expiry of the existing chair’s suspension,
and

(b) the remainder of the interim chair’s term as a non-executive member.

(3) 10A person who ceases to be the interim chair is eligible for reappointment.

Payment of non-executive members

6 The SSRO may, with the approval of the Secretary of State—

(a) pay remuneration and allowances to the non-executive members,
and

(b) 15pay or provide for the payment of pensions, allowances and
gratuities to or in respect of a person who is or has been a non-
executive member of the SSRO.

Staff etc

7 (1) The SSRO may appoint employees.

(2) 20The SSRO may pay its employees remuneration and allowances.

(3) Employees of the SSRO are to be appointed on such other terms and
conditions as the SSRO may determine.

(4) The SSRO may pay or provide for the payment of pensions, allowances and
gratuities to or in respect of any person who is or has been an employee of
25the SSRO.

8 (1) The SSRO may make arrangements—

(a) for persons to provide professional services to the SSRO;

(b) for persons to be seconded to the SSRO.

(2) The arrangements may, with the approval of the Secretary of State, include
30provision for payments by the SSRO.

Superannuation

9 (1) In Schedule 1 to the Superannuation Act 1972 (kinds of employment to
which a scheme under section 1 of that Act can apply), at the end of the list
of “Other Bodies” insert—

(2) The SSRO must pay to the Minister for the Civil Service, at such times as the
Minister may direct, such sums as the Minister may determine in respect of
any increase attributable to sub-paragraph (1) in the sums payable out of
money provided by Parliament under the Superannuation Act 1972.

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Procedure

10 (1) The SSRO may determine its own procedure; but this is subject to sub-
paragraphs (2) to (6).

(2) A function of the SSRO under or by virtue of a provision listed in sub-
5paragraph (3) (provisions for the making of determinations, the giving of
opinions etc by the SSRO) is exercisable by a committee appointed under
paragraph 11.

(3) The provisions are—

(4) A committee appointed for the purposes of sub-paragraph (2) must consist
20of three persons appointed by the chair or any other member who has been
authorised (generally or specifically) for that purpose.

(5) At least one of the members of such a committee must be a person who is not
a member or employee of the SSRO.

(6) A determination by such a committee—

(a) 25is to be made on the basis of a majority of the committee, and

(b) is final.

(7) The validity of any act of the SSRO is not affected—

(a) by any vacancy among the members, or

(b) by any defect in the appointment of a member.

30Committees

11 (1) The SSRO—

(a) may appoint committees, and

(b) may determine the procedure of its committees (subject to paragraph
10).

(2) 35A committee may include persons who are not members or employees of the
SSRO.

(3) The SSRO may pay remuneration and allowances to any person who—

(a) is a member of a committee, but

(b) is not an employee of the SSRO,

40whether or not that person is a non-executive member of the SSRO.

Accounts and audit

12 (1) The SSRO must—

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(a) keep proper accounts and proper records in relation to them, and

(b) prepare a statement of accounts in respect of each financial year.

(2) The Secretary of State may give directions to the SSRO about—

(a) the content and form of the statement, and

(b) 5the methods and principles to be applied in preparing it.

(3) The SSRO must send each statement to the Comptroller and Auditor
General within such period after the end of the financial year to which the
accounts relate as the Secretary of State may direct.

(4) The Comptroller and Auditor General must—

(a) 10examine, certify and report on each statement, and

(b) send a copy of each report and certified statement to the Secretary of
State.

Annual report

13 (1) The SSRO must prepare a report on its activities during each financial year.

(2) 15The report must include the statement of accounts in respect of that year.

(3) The report relating to a financial year must be prepared as soon as possible
after the end of the financial year.

(4) The SSRO must send the report to the Secretary of State.

(5) The Secretary of State must lay the report before Parliament.

20Powers

14 (1) The SSRO may do anything which is calculated to facilitate the carrying out
of its functions or which is incidental to or conducive to the carrying out of
those functions; but this is subject to sub-paragraph (2).

(2) The SSRO may not borrow money, other than temporarily by way of
25overdraft up to a limit approved by the Secretary of State.

Seal and evidence

15 (1) The application of the SSRO’s seal must be authenticated by the signature of
the chief executive or any other member of the SSRO who has been
authorised (generally or specifically) for that purpose.

(2) 30A document purporting to be duly executed under the SSRO’s seal or signed
on its behalf—

(a) is to be received in evidence, and

(b) is to be taken to be executed or signed in that way, unless the
contrary is proved.

35Finance

16 (1) The Secretary of State may make to the SSRO such payments out of money
provided by Parliament as the Secretary of State considers appropriate.

(2) Payments under sub-paragraph (1) may be made at such times, and subject
to such conditions, as the Secretary of State considers appropriate.

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Status

17 (1) The SSRO is not to be regarded—

(a) as the servant or agent of the Crown, or

(b) as enjoying any status, immunity or privilege of the Crown.

(2) 5The SSRO’s property is not to be regarded as property of, or property held
on behalf of, the Crown.

(3) Service as a member or employee of the SSRO is not service in the civil
service of the State.

Parliamentary Commissioner

18 10In Schedule 2 to the Parliamentary Commissioner Act 1967 (departments etc
subject to investigation), at the appropriate place insert—

Disqualification

19 In Part 2 of Schedule 1 to the House of Commons Disqualification Act 1975
15(bodies of which all members are disqualified)—

(a) at the appropriate place insert—

(b) omit the entry for The Review Board for Government Contracts.

20 In Part 2 of Schedule 1 to the Northern Ireland Assembly Disqualification
20Act 1975 (bodies of which all members are disqualified)—

(a) at the appropriate place insert—

(b) omit the entry for The Review Board for Government Contracts.

Freedom of information

21 25In Part 6 of Schedule 1 to the Freedom of Information Act 2000 (public
authorities to which Act applies)—

(a) at the appropriate place insert—

(b) omit the entry for The Review Board for Government Contracts.

Section 38

30SCHEDULE 5 Restrictions on disclosing information

Information to which Schedule applies

1 (1) This Schedule applies to information if—

(a) it was obtained by the Secretary of State, an authorised person or the
35SSRO under or by virtue of this Part or otherwise in connection with
the carrying out of functions under or by virtue of this Part, or is
derived to any extent from information that was so obtained,

(b) it relates to the affairs of an individual or to a particular business, and

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(c) it is of a kind specified in single source contract regulations.

(2) Information ceases to be information to which this Schedule applies—

(a) in the case of information relating to the affairs of an individual,
when the individual dies, and

(b) 5in the case of information relating to a particular business, on the
earlier of—

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