Postal Services Bill [HL]

House of Commons

Session 2008 - 09
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Other Bills before Parliament

Postal Services Bill [HL]

Postal Services Bill [HL]
Part 1 — Restructuring of Royal Mail group
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[NOTE: The words marked in bold type were inserted by the Lords to avoid
questions of privilege.]
A
Bill
To
Make provision for the restructuring of the Royal Mail group and about the
Royal Mail Pension Plan; to make new provision about the regulation of postal
services; and for connected purposes.
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—
Part 1
Restructuring of Royal Mail group
Ownership of the Post Office
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Post Office companies to be owned in their entirety by the Crown
(1)
Each Post Office company must at all times be owned in its entirety by the
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Crown.
(2)
Accordingly—
(a)
any issue or transfer of shares in a company is of no effect if it would
cause a Post Office company to cease to be owned in its entirety by the
Crown, and
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(b)
any issue or transfer of share rights to a person is of no effect if the
acquisition by the person of the shares to which the share rights relate
would cause a Post Office company to cease to be owned in its entirety
by the Crown.
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Meaning of “Post Office company”
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(1)
In this Part “Post Office company” means a company that—
(a)
is engaged in the provision of post offices,
(b)
is or has at any time been—
(i)
a subsidiary of the original holding company, or

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Postal Services Bill [HL]
Part 1 — Restructuring of Royal Mail group
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(ii)
in the same group as a company that is or (as the case may be)
was at that time designated under this section, and
(c)
is designated for the purposes of this subsection by order made by the
Secretary of State.
(2)
A company may be designated only if, immediately before it is designated, it
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is owned in its entirety by the Crown.
(3)
An order under subsection (1) may not be amended or revoked.
(4)
An order under section 64 that appoints a day for the commencement of the
repeal (by Schedule 10) of section 65 or 66 of the Postal Services Act 2000 (c. 26)
(restrictions on issue or disposal of shares in the original holding company etc)
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may not be made unless Post Office Limited (registered number 02154540) has
been designated under subsection (1).
Ownership of the Royal Mail
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Royal Mail companies to be publicly owned
(1)
Each Royal Mail company must at all times be publicly owned.
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(2)
Accordingly—
(a)
any issue or transfer of shares in a company is of no effect if it would
cause a Royal Mail company to cease to be publicly owned, and
(b)
any issue or transfer of share rights to a person is of no effect if the
acquisition by the person of the shares to which the share rights relate
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would cause a Royal Mail company to cease to be publicly owned.
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Meaning of “Royal Mail company”
(1)
In this Part “Royal Mail company” means a company that—
(a)
provides a universal postal service,
(b)
is or has at any time been—
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(i)
a subsidiary of the original holding company, or
(ii)
in the same group as a company that is or (as the case may be)
was at that time designated under this section, and
(c)
is designated for the purposes of this subsection by order made by the
Secretary of State.
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(2)
A company may be designated only if, immediately before it is designated, it
is publicly owned.
(3)
An order under subsection (1) may not be amended or revoked.
(4)
An order under section 64 that appoints a day for the commencement of the
repeal (by Schedule 10) of section 65 or 66 of the Postal Services Act 2000
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(restrictions on issue or disposal of shares in the original holding company etc)
may not be made unless Royal Mail Group Limited (registered number
04138203) has been designated under subsection (1).

Postal Services Bill [HL]
Part 1 — Restructuring of Royal Mail group
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Securities
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Power to direct issue of certain securities
(1)
The Secretary of State may direct—
(a)
a Post Office company,
(b)
a Royal Mail company, or
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(c)
a company in the same group as a company within paragraph (a) or (b),

to issue securities to the Secretary of State or the Treasury (or to a nominee of
either of them).
(2)
The Secretary of State may direct—
(a)
a Post Office company, or
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(b)
a Royal Mail company,

to issue securities to a parent company that is owned in its entirety by the
Crown.
(3)
A direction under this section may be given only to a company that is owned
in its entirety by the Crown.
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(4)
A direction must specify—
(a)
the kind and amount of securities to be issued,
(b)
the terms of issue, and
(c)
the date at or by which the securities must be issued.
(5)
Any shares issued in pursuance of a direction under this section are to be—
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(a)
issued as fully paid, and
(b)
treated for the purposes of the Companies Acts (as defined by section 2
of the Companies Act 2006 (c. 46)) as if they had been paid up by virtue
of payment of their nominal value in cash.
(6)
A direction under this section may be given only—
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(a)
with the consent of the Treasury, and
(b)
after the Secretary of State has consulted—
(i)
the company to whom the direction is to be given, and
(ii)
if that company has one or more parent companies, the parent
company that does not itself have a parent company.
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Government investment in certain securities
(1)
The Treasury may acquire securities of a relevant company.
(2)
The Secretary of State may, with the consent of the Treasury, acquire securities
of a relevant company.
(3)
Securities acquired under this section may be held by a nominee.
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(4)
In this section “relevant company” means—
(a)
a Post Office company;
(b)
a Royal Mail company; or
(c)
a company in the same group as a company within paragraph (a) or (b);

Postal Services Bill [HL]
Part 1 — Restructuring of Royal Mail group
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Transfer of property etc
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Transfer schemes
(1)
The original holding company may (if it is owned in its entirety by the Crown)
make one or more transfer schemes.
(2)
A “transfer scheme” is a scheme for the transfer of property, rights or liabilities
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(or the creation of interests, rights or liabilities) between companies within
subsection (3).
(3)
A company is within this subsection if—
(a)
it is the original holding company or a subsidiary of that company, and
(b)
it is owned in its entirety by the Crown.
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(4)
A transfer scheme has effect—
(a)
only if approved by the Secretary of State, and
(b)
subject to any modifications made by the Secretary of State.
(5)
Before making any modifications the Secretary of State must consult the
original holding company.
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(6)
The Secretary of State may direct the original holding company (if it is owned
in its entirety by the Crown) to make a transfer scheme in accordance with the
direction.
(7)
Schedule 1 contains further provision about transfer schemes.
(8)
Nothing in that Schedule is to be read as restricting the provision that may be
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contained in transfer schemes.
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Transfer of employees otherwise than under transfer scheme
(1)
This section applies if an agreement in writing between companies within
subsection (3) provides for the transfer from one to the other of rights and
liabilities under contracts of employment.
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(2)
This section also applies if—
(a)
a company within subsection (3) (“company A”) carries out activities
on behalf of another company within that subsection (“company B”),
(b)
an agreement in writing between the companies provides for company
A to cease to carry out the activities on behalf of company B, and
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(c)
company B intends to carry out the activities on its own behalf.
(3)
A company is within this subsection if—
(a)
it is the original holding company or a subsidiary of that company, and
(b)
it is owned in its entirety by the Crown.
(4)
At any time before the agreement comes into force, the Secretary of State
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may—
(a)
in a case within subsection (1), designate any contract of employment
the rights and liabilities under which are to be transferred under the
agreement;
(b)
in a case within subsection (2), designate any employee of company A
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involved in the carrying out by that company of the activities
mentioned in subsection (2)(a).

Postal Services Bill [HL]
Part 1 — Restructuring of Royal Mail group
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(5)
The designation may specify or describe the contracts of employment or
employees.
(6)
On the coming into force of the agreement, the Transfer of Undertakings
(Protection of Employment) Regulations 2006 (S.I. 2006/246) apply in relation
to—
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(a)
the transfer of designated contracts of employment, and
(b)
the cessation by designated employees of activities within subsection
(2)(a),

whether or not the agreement would otherwise be regarded for the purposes
of those regulations as giving rise to a relevant transfer.
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(7)
Where by virtue of the agreement a designated employee of a company within
subsection (3) (“the transferor”) becomes an employee of another company
within that subsection (“the transferee”)—
(a)
a period of employment with the transferor is to be treated as a period
of employment with the transferee, and
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(b)
the transfer to the transferee is not to be treated as a break in service.
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Taxation provisions relating to re-structuring
Schedule 2 contains taxation provisions.
Ownership
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Meaning of “owned in its entirety by the Crown” and “publicly owned”
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(1)
For the purposes of this Part a company is “owned in its entirety by the Crown”
if the Crown owns all of it (directly or indirectly).
(2)
For those purposes a company is “publicly owned” if the Crown owns more
than half of it (directly or indirectly).
(3)
The following provisions supplement this section—
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section 11 (indirect ownership of companies);
section 12 (meaning of “ownership of a company”).
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Indirect ownership of companies
(1)
Where—
(a)
the Crown or another person owns (directly or indirectly) part or all of
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a company (“company A”), and
(b)
company A owns part or all of another company (“company B”),

the appropriate proportion of company B is to be regarded as indirectly owned
by the person.
(2)
“The appropriate proportion” is—
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where—
X is the proportion of company A owned by the person, and
Y is the proportion of company B owned by company A.