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Orders of the Day

Employment Relations Bill

Lords amendments further considered.

Lords amendment No. 21 agreed to.

New Clause

Lords amendment: No. 22, after clause 27, to insert the following new clause--Employment rights: employment outside Great Britain--

" .--(1) In section 285(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 (employment outside Great Britain) for "Chapter II (procedure for handling redundancies)" there shall be substituted "sections 193 and 194 (duty to notify Secretary of State of certain redundancies)".
(2) After section 287(3) of that Act (offshore employment) there shall be inserted--
"(3A) An Order in Council under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.".
(3) Section 196 of the Employment Rights Act 1996 (employment outside Great Britain) shall cease to have effect; and in section 5(1) for "sections 196 and" there shall be substituted "section".
(4) After section 199(6) of that Act (mariners) there shall be inserted--
"(7) The provisions mentioned in subsection (8) apply to employment on board a ship registered in the register maintained under section 8 of the Merchant Shipping Act 1995 if and only if--
(a) the ship's entry in the register specifies a port in Great Britain as the port to which the vessel is to be treated as belonging,
(b) under his contract of employment the person employed does not work wholly outside Great Britain, and
(c) the person employed is ordinarily resident in Great Britain.
(8) The provisions are--
(a) sections 8 to 10,
(b) Parts II, III and V,
(c) Part VI, apart from sections 58 to 60,
(d) Parts VII and VIII,
(e) sections 92 and 93, and
(f) Part X."."

4.7 pm

The Minister of State, Department of Trade and Industry (Mr. Ian McCartney): I beg to move, That this House agrees with the Lords in the said amendment.

Madam Speaker: With this, it will be convenient to take Lords amendments Nos. 306, 325 and 329.

Mr. McCartney: Section 196 of the Employment Rights Act 1996 generally limits the operation of the Act to employees who ordinarily work in Great Britain. It is a complicated section resulting from several consolidations, some relating to legislation at least a quarter of a century old.

After careful consideration, we concluded that the complexities are unnecessary. International law and the principles of our domestic law are enough to ensure

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that our legislation does not apply in inappropriate circumstances. There must be some proper connection with the UK first, and in such cases it is right that UK law should apply. Other legislation has no need for such restrictions. We believe that now is the time to simplify the provisions, in line with our commitment to good regulation.

Repealing that section has a number of other significant advantages. It ensures that we fulfil our European Union obligations, which, in some circumstances, mean that rights that are derived from Europe should apply to individuals who may not currently be covered. It extends employment rights to employees temporarily working in Great Britain and thus facilitates the implementation of the posting of workers directive, which otherwise would require further regulations later this year. It also means that people who may have worked for some years in the UK, but who are nevertheless excluded from claiming under the Employment Rights Act 1996, will be able to rely on the protection of our legislation, as should be the case. The recent case of Carver v. Saudi Arabian Airlines demonstrates the need for this provision.

I do not claim that the amendment will have dramatic effects in practice--few cases arise, and the additional costs to employers will be minimal. Nevertheless, it takes forward an important principle, and modernises and simplifies our legislation. The position of mariners is special, and special provisions apply to them at present under sections 196 and 199. The amendment ensures that their position is unchanged.

The implications of doing otherwise can be fully examined in the longer term. The new powers in the Bill to confer rights--clause 20, which would become section 23 of the Act--will provide us with the opportunity to consult on whether changes to the provisions applying to mariners would be desirable.

The first subsection in the new clause makes a parallel change to the Trade Union and Labour Relations (Consolidation) Act 1992, removing the territorial restriction in that Act on rights to be consulted about mass redundancies. Subsection (2) is a purely technical change to powers in the 1992 Act to extend rights to offshore installations. Currently no procedure is specified for making the order. The amendments will provide for negative resolution, in line with the procedure that applies under the Employment Rights Act 1996.

Amendments 306, 325 and 329 are consequential to the repeal of section 196.

Lords amendment agreed to.

Lords amendment No. 23 agreed to.

New Clause

Lords amendment: No. 24, after clause 32, to insert the following new clause--Transfer of undertakings--

".--(1) This section applies where regulations under section 2(2) of the European Communities Act 1972 (general implementation of Treaties) make provision for the purpose of implementing, or for a purpose concerning, a Community obligation of the United Kingdom which relates to the treatment of employees on the transfer of an undertaking or business or part of an undertaking or business.
(2) The Secretary of State may by regulations make the same or similar provision in relation to the treatment of employees in circumstances other than those to which the Community obligation applies (including circumstances in which there is no transfer, or no transfer to which the Community obligation applies).

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(3) Regulations under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament."

Mr. Ian McCartney: I beg to move, That this House agrees with the Lords in the said amendment.

We indicated in our "Fairness at Work" White Paper our intention to revise the Transfer of Undertakings (Protection of Employment) Regulations 1981--commonly known as the TUPE regulations--to improve their operation. These regulations implement the European Communities acquired rights directive, and safeguard employees' rights when the business in which they work changes hands between employers.

Since the White Paper was published, we have agreed with our European partners a new, improved directive: that was a notable success for the UK presidency last year. The new directive sets out for the first time an explicit definition of the transfer of an undertaking. It also gives member states clear options to allow, but not require, independent workers' representatives to negotiate changes to terms and conditions to save jobs when the undertaking of an insolvent employer is transferred, just as they can in cases of insolvency when no transfer is involved; to provide that the transferor's outstanding debts in relation to the employees do not pass to the transferee, so as to save jobs when the undertaking of an insolvent employer is transferred; to ensure that the transferor notifies the transferee of all the rights and obligations that will be transferred in a relevant transfer so far as they are or should be known to the transferor; and to include all occupational pension rights within the terms and conditions that pass from the transferor to the transferee in a relevant transfer.

The amendment of the directive has laid the groundwork for our revision of the regulations. Officials in my Department are currently drawing up detailed proposals, in liaison with colleagues elsewhere in Whitehall and in informal discussions with the main employer and employee representative bodies and other outside interests, in line with social partnership principles. I am grateful for the constructive contribution that the Confederation of British Industry, the Trades Union Congress and others have made to this process.

There is a high degree of consensus on the main issues to be addressed in the revision of the regulations. That is particularly so in the area of public sector contracting, where we have been assisted by the TUPE forum, which is a representative body with members from the CBI, the TUC, Unison, the Construction Confederation, the Business Services Association, the Local Government Management Board, the Association of Direct Labour Organisations and others.

Our aim is to seek views on our detailed proposals by way of a formal public consultation document to be published a little later in the year, and to have the new requirements in place by next spring.

As this work has progressed, however, it has become clear that some of the changes that we may decide to make could not be achieved under the existing powers in section 2(2) of the European Communities Act 1972. In particular, extending the scope so as to give rights to individuals when they would not have them under the directive could not be done under those existing powers. That limits the options available for tackling two major areas of uncertainty in the regulations: their application to contracting-out operations and their application to transfers involving public sector bodies.

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If we had to rely on the existing powers alone, we could be prevented from putting forward proposals to meet the widespread expectation--shared by employer and employee bodies alike--that the new regulations will apply comprehensively to changes that occur in service contracting. Specifically, it could prevent us from ensuring that recontracting or bringing back in-house of a contracted-out service was covered in cases where the conditions in the directive were not met, but where it was wished to provide consistent treatment.

The existing powers would also be insufficient to allow us to apply the regulations to transfers of purely administrative functions between public administrative bodies, should we wish to do so.

Amendment No. 24 seeks to remove those technical obstacles, so that we can be certain that we have sufficient powers to achieve what we are likely to be asked to achieve when we go out to formal public consultation.

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