|Postal Services Bill - continued||House of Commons|
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196. This clause abolishes the Postal Services Commission, and applies the provisions of the Communications Act 2003 applicable to pre-commencement regulators under that Act in respect of transfers of property, rights and liabilities to the transfer from Postcomm to OFCOM. It makes provision for the Transfer of Undertakings (Protection of Employment) Regulations 2006 to apply to the transfer of staff from Postcomm to OFCOM. It also provides that the transfer of functions, assets or liabilities from Postcomm to OFCOM under or by virtue of this Bill is not to be treated as a merger for accounting purposes.
197. Subsection (1) defines various terms used in Part 3 of the Bill. Subsection (2) deals with references in relation to a universal postal service. Subsection (3) defines contravention and other references relating to contraventions (for example, remedying the consequences of a contravention).
198. This clause introduces Schedule 9, which contains transitional provisions in relation to the coming into force of Part 3 of the Bill.
Clause 61: Orders and regulations made by the Secretary of State or the Treasury
199. This clause provides that any orders and regulations made under this Bill by the Secretary of State or the Treasury must be made by statutory instrument.
200. Subsection (2) provides that orders or regulations may contain incidental, supplementary, consequential, transitional, transitory or saving provision and may make different provision for different cases or circumstances.
201. Subsections (4) and (5) define affirmative resolution procedure and negative resolution procedure.
202. Subsection (7) provides the flexibility to include provisions requiring negative resolution in a statutory instrument which is subject to affirmative resolution.
203. This clause defines enactment as including any enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978, and any enactment contained in, or an instrument made under: an Act of the Scottish Parliament; Northern Ireland legislation; and a Measure or Act of the National Assembly for Wales.
204. This clause introduces Schedule 10 which contains minor and consequential amendments and repeals.
205. Subsection (3) also gives the Secretary of State or the Treasury the power by order to make further consequential amendments.
206. Subsection (2) of this clause provides for certain provisions to come into force on the day after the Bill is passed. Subsection (3) provides that the other provisions of this Bill come into force on such day as the Secretary of State or the Treasury may by order appoint (and different days may be appointed for different purposes).
207. Subsection (4) provides that the Secretary of State or the Treasury may by order make transitional provisions and savings in connection with the commencement of any provision made by this Bill.
208. This Schedule contains further provision about transfer schemes under clause 7.
209. Paragraph 1 defines various terms used in Schedule 1. Paragraph 2 provides that a transfer scheme may identify property rights and liabilities to be transferred by specifying or describing them, and may specify the way in which property, rights or liabilities of any description may be identified Paragraph 3 contains further provisions as to the property, rights and liabilities that may be transferred under a scheme and the basis on which they are to be transferred.
210. Paragraph 4 provides that the transfer scheme may contain provision for the creation or transfer of an interest or a right in, or in relation to, property transferred and property retained. It may also contain provision for the creation of new rights and liabilities between different transferees and as between a transferee and a transferor. It also allows for the transfer scheme to contain provision to cover the interests, rights or liabilities of third parties.
211. Paragraph 5 provides that an obligation may be imposed on a transferee or transferor to enter into an agreement to effect the transfer(s) and allows for this to be enforced by an injunction or any other appropriate remedy.
212. Paragraph 6 provides that the transfer and creation of the relevant property, interests, rights and liabilities vest in the transferee at the time specified in the scheme, save where it is to be effected by an agreement or instrument entered into or executed under paragraph 5(1).
213. Paragraph 7 provides that where a person would be entitled to terminate, modify, acquire or claim an interest or right, or treat an interest or right as modified or terminated by virtue of anything done or likely to be done in connection with a transfer scheme, then that right is not enforceable until after the transfer of the interest or right under the scheme and only to the extent that the scheme provides for the interest or right to have been transferred subject to that persons entitlement.
214. Paragraph 8 provides that a transfer scheme may contain incidental, supplementary, consequential and transitional provision, and that different provision may be made for different purposes. Under Paragraph 9, a transfer scheme may provide, in relation to transfers in accordance with the scheme, that the transferee is treated as the same person in law as the transferor, for things done by the transferor to be treated as done by the transferee and for proceedings commenced by or against the transferor to be continued by or against the transferee.
215. Paragraph 10 makes provision for the transfer of foreign property. Paragraph 11 provides that a transfer scheme may make provision for and in connection with the payment of compensation to third parties whose property, rights, interests or liabilities have been affected by (or by virtue of) a transfer scheme. It also provides for the appointment of an arbitrator (or an arbiter in Scotland) to determine disputes about compensation.
216. Paragraph 12 provides that a transfer scheme may make provision for disputes. Paragraph 13 makes provision for persons, entitled in consequence of a transfer scheme, to possession of a document relating in part to the title to land or other property or the management of such property or land to have been treated as having given another person an acknowledgement in writing of the right of that other person to production of the document and to delivery of copies of it. Paragraph 14 provides for proof of title by certificate issued by the Secretary of State.
217. Paragraph 15 provides that the Transfer of Undertakings (Protection of Employment) Regulations 2006 apply to the transfer under a transfer scheme of rights or liabilities under a contract of employment. Paragraph 16 provides that where an employee of the transferor becomes an employee of the transferee, the period of employment with the transferor is to be treated as a period of employment of the transferee, and the transfer is not to be treated as a break in service.
218. Paragraph 17 allows for modification of a transfer scheme within three years of the vesting of a transfer, provided it is agreed by the transferor and transferee and approved by the Secretary of State.
219. Paragraph 18 disapplies certain provisions of the Companies Act 2006, together with rules of law relating to those provisions or the maintenance of capital by companies.
220. Paragraphs 1 to 4 determine certain aspects of the tax implications of an event which causes a Royal Mail company, a Post Office company, or the parent of such a company, or a subsidiary of a Royal Mail company, to leave the existing tax group which can occur when a companys shares are sold or shares are moved around the group. These paragraphs prevent tax charges arising as a result of the degrouping for the purposes of both corporation tax on chargeable gains and stamp duty land tax.
221. Paragraphs 5 and 6 ensure that no tax liabilities should arise from a reorganisation of the structure of the Crowns shareholding in a Post Office Company.
222. Paragraphs 7 and 8 make provision as regards corporation tax in relation to the issue of shares and other securities in pursuance of clause 5 and section 74 of the Postal Services Act 2000.
223. Paragraph 9 makes provision as regards corporation tax in relation to any debt assumed by a company under section 74(1) of the Postal Services Act 2000.
Part 1 Provision that may be made by access conditions
224. Paragraph 1 introduces Part 1 of the Schedule and states that access conditions of the kind set out in Part 1 may by imposed but that the power to impose them is not restricted by these provisions.
225. Paragraph 2 provides that an access condition may include provision relating to the terms and conditions, on which a person is willing to offer access, or require such modifications as OFCOM may direct to any offer of access.
226. Paragraph 3 provides that an access condition may include provision imposing such price controls as OFCOM may direct. An access condition may also impose rules about the identification of costs and rules about the use of cost accounting systems. An access condition may also impose an obligation to have compliance with those systems audited annually by a qualified independent auditor, including meeting the costs of the audit, and an obligation to adjust prices following a direction from OFCOM.
227. Paragraph 4 provides that an access condition may include provision requiring the application of presumptions in the fixing or determining costs and charges for the purposes of price control set out in paragraph 3.
228. Paragraph 5 sets out the publication and information requirements that may form part of an access condition which imposes rules on the use of cost accounting systems.
229. Paragraph 6 makes provision for access requirements to be imposed on another person, other than the postal operator, where the access required is subject to an arrangement between the postal operator and that person and the access requires that persons agreement. However, such requirements can not have the effect of requiring that person to do more than they would otherwise be required to do.
230. Paragraph 7 provides that, where an access condition requires accounting separation, the condition may provide for the separation to by maintained for different services, facilities or products (including those provided in different areas) and may impose requirements about the accounting methods to be used.
231. Paragraph 8 provides that an access condition may include a restriction on the use for any other purpose of information which is obtained in connection with the giving of access.
232. Paragraph 9 provides that an access condition may set time limits for compliance.
233. Paragraph 10 provides that an access condition may include provision for securing fairness and reasonableness when dealing with requests for access.
234. Paragraph 11 provides that an access condition may include a requirement of non-discrimination in relation to the giving of access.
235. Paragraph 12 provides that an access condition may include a requirement to publish all such information as OFCOM directs, for transparency in access matters, or the terms and condition on which the person is willing to offer access.
Part 2 Resolution of access disputes by OFCOM
236. Under Paragraphs 13 to 15, postal operators and users may refer disputes concerning the terms and conditions of access, including price, to OFCOM who will decide if it is appropriate from them to handle the dispute. If OFCOM does handle the dispute it must consider the dispute and make a binding determination for resolving it as soon as reasonably practicable.
237. Paragraph 16 sets out the powers that may be exercised by OFCOM when making a determination. OFCOMs powers include: (a) setting out the rights and obligations of parties (b) fixing the terms or conditions of transactions between parties (c) imposing an obligation on parties to enter into a transaction on the terms and conditions fixed by OFCOM (d) requiring the payment, by way of an adjustment, of an underpayment or overpayment (e) requiring a party to a dispute to pay another parties costs and expenses incurred in connection with the dispute (f) ) requiring a party to a dispute to pay OFCOMs costs in frivolous or vexations cases.
238. Paragraph 17 stipulates that the resolution of access dispute procedure is the procedure OFCOM considers appropriate. OFCOM must send a copy of their determination, and statement of reasons, to every party to the dispute and must publish so much of their determination as they consider appropriate (having regard in particular to commercial confidentiality).
239. Paragraph 18 provides that a reference to OFCOM does not prevent a person from bringing other legal proceedings. OFCOM is not prevented by a reference from exercising their powers.
240. Paragraph 19 provides, that where a dispute has been referred to OFCOM, OFCOM may require information to be provided to them.
241. Paragraph 1 provides that a postal operator providing services with the scope of the universal postal service, must pay OFCOM an administrative charge (if any) fixed by OFCOM. OFCOM can only fix an administrative charge if it has set out in a statement the principles they propose to apply in determining charges. The principles must be such that on OFCOMs estimates the total amount payable (from all operators combined) each year meets but does not exceed OFCOMs costs of carrying out their postal functions. OFCOM may impose different charges on different operators.
242. Paragraph 1 further provides that at the end of each charging year OFCOM must publish a financial statement setting out total charges received that year, total charges outstanding that year, and cost to OFCOM of carrying out their postal service functions. Any surplus or deficit should be taken into account in determining charges for the following year.
243. Paragraph 2 defines OFCOMs functions in relation to postal services for the purposes of paragraph 1.
244. Paragraph 3 provides for the procedure under which a charge is to be fixed by OFCOM under paragraph 1.
245. Paragraph 4 allows OFCOM to bring proceedings against a person who they believe is in contravention of a requirement to pay a charge imposed under paragraph 1. OFCOM may only do this if they give the person notification of the amount they are seeking to recover.
246. OFCOM must also specify the period that the person has to make representations about the notification and to pay the outstanding amount. The period must be at least one month, but it can be shorter if the two parties agree. It can also be shorter if OFCOM believe the contravention is a repeated one and they have determined that under such circumstances a shorter period would be appropriate. OFCOM may also allow a longer period.
247. Under paragraph 6 OFCOM may impose a penalty on a person if they have been in contravention of a requirement to pay a charge as outlined under paragraph 1, and the procedures detailed under paragraph 4 have been followed, and the person has still not paid the outstanding amount.
248. The amount of the penalty is to be determined by OFCOM and must be appropriate and proportionate to the contravention. It cannot be more than twice the charge fixed for the year when the contravention occurred. In determining the amount OFCOM must have regard to representations made by the person and any steps the person has taken towards paying the outstanding amounts.
249. If OFCOM decide to impose a penalty they must notify the person within one week of making their decision and fix a period by which the penalty is to be paid.
250. Under paragraph 7 OFCOM may give a direction to a contravening operator to suspend or restrict their services.
251. For this to happen four conditions must be met. The first is that the contravening operator is or has been in serious and repeated contravention of requirements to pay charges. The second is that the bringing of proceedings for the recovery of amounts outstanding has not secured compliance by the contravening operator and has no reasonable prospect of doing so. The third is that the imposition of penalties under paragraph 6 failed to secure compliance. And the fourth is that giving the direction is appropriate and proportionate to the seriousness of the contraventions.
252. Paragraph 8 explains that such a direction will be for an indefinite period unless otherwise stated.
253. A direction may also impose conditions on the operator as appear to OFCOM to be appropriate to protect users of the operators services. These may require making compensation payments for loss or damage, or for inconvenience. OFCOM may only give the direction if they have notified the contravening operator, provided the operator with an opportunity of making representations and proposals as to how to remedy the situation, and considered those representations. The period for this must be at least one month.
254. OFCOM may revoke a direction if they consider it appropriate.
255. Under paragraph 9 a person commits an offence if they provide a service while the entitlement to do so is suspended by a direction under paragraph 7 or in contravention of restriction contained in that direction.
256. If a person is guilty of an offence then they are liable to a fine on conviction.
257. This Schedule sets out the considerations OFCOM must have regard to in deciding whether to approve a redress scheme for the purposes of clause 49. These include the schemes provisions, how it will operate, the interests of users of postal services, and best practice in relation to schemes for providing redress to consumers. It further outlines certain requirements for a redress scheme, namely that it must be open to all postal operators, that the independent adjudicator may require members to provide complainants with the minimum types of redress (which include apologies and compensation), and that it makes satisfactory provision about a series of matters. Redress schemes may make provision for the expulsion of their members.
258. OFCOM may determine the manner for approval of a redress scheme and OFCOM must be notified of any changes to the scheme.
259. There are also provisions regarding the processes that OFCOM must follow in refusing or withdrawing approval of a redress scheme.
260. Paragraph 1 provides that OFCOM can only impose or modify a regulatory condition if they are satisfied that this is objectively justifiable, non-discriminatory, proportionate to the intent, and transparent.
261. Paragraph 2 states that the power of OFCOM to impose a regulatory condition includes powers to make directions, consent, approvals and recommendations, discretions, different provisions for different cases, and revocation and modification.
262. Paragraph 3 sets out that the procedure for imposing, modifying or revoking a regulatory condition. OFCOM must publish a notification setting out its intention to impose, modify or revoke a regulatory condition, setting out the effect and giving its reasons for making the proposal and giving at least one month for the making of representations. OFCOM must consider every representation about the proposal and have regard to every international obligation notified to them by the Secretary of State. The publication of the notification must be in a manner which brings its contents to the attention of the persons who are likely to be affected by its contents, in the case of a designated USP condition, a USP access condition or USP accounting condition, or to the attention of such persons as OFCOM consider appropriate, in any other case.
263. Paragraph 4 provides that directions, approvals or consents for the purpose of imposing a regulatory condition are subject to similar provisions as apply to the imposition of conditions, as set out in paragraphs 1 to 3.
264. Paragraph 5 deals with the delivery of copies of notifications, directions, approvals or consents or modifications and withdrawals. The Secretary of State must receive a copy of any publication required under either paragraph 3 or 4. Additionally, with respect to a designated USP condition or general universal service condition, a copy of must be sent to the European Commission. The responsibility of sending any copy rests with the person who has published it or has given, modified or withdrawn it unless it relates to a proposal published by OFCOM under paragraph 4, in which case OFCOM have the duty.
265. This Schedule provides for the enforcement of regulatory requirements imposed on postal operators (or those party to an arrangement through which access is required as a result of paragraph 6 of Schedule 3) by OFCOM. A regulatory requirement means any regulatory conditions imposed under Part 3 of the Bill, as well as directions in relation to schemes about the terms and conditions for the provision of postal services (section 89A of the Postal Services Act), directions in relation to the Postcode Address File (under section 116(2A) of the Postal Services Act) and in relation to the enforcement of requirements to give information to the National Consumer Council (section 25(5) of the Consumers, Estate Agents and Redress Act 2007).
266. Paragraphs 2 to 4 provide for contravention notifications. OFCOM may give a notification that they have reasonable grounds to believe a person is contravening or has contravened a regulatory requirement. A notification must specify a period giving the person notified the opportunity to make representations, comply and remedy the consequences. That period must be one month, or less than a month by agreement, because of repeated contravention, or because the case is urgent, and OFCOM may also specify a longer period. OFCOM may give a further notification for the same contravention only if certain conditions are met. OFCOM may not give a notification if they decide that the more appropriate way of proceeding would be under the Competition Act 1998.
267. The Schedule provides for various sanctions for contraventions and a power to deal with urgent cases in case of contravention.
268. Paragraph 5 provide for enforcement notifications, where a contravention notification has been given, OFCOM have allowed an opportunity for representations, and the period for representations has ended. OFCOM may give an enforcement notification if they are satisfied that the person is in contravention and steps have not been taken for complying with the requirement and remedying the consequences of the contravention. This requires the person notified to comply with requirements and/or take remedial steps. There is a duty to comply with the notification, which is enforceable in civil proceedings.
269. As set out in paragraphs 6 to 7, OFCOM may impose, in addition to an enforcement notification, a penalty on a person who has been given a contravention notification, when OFCOM have allowed an opportunity for representations, and the period for representations has ended. Penalties must be appropriate, proportionate and not more than 10% of turnover of the persons postal services business for the relevant period, calculated in accordance with rules made in order by the Secretary of State. Such an order is subject to affirmative resolution procedure. OFCOM must have regard to representations made by that person and any steps taken to comply or remedy the consequences of the contravention.
270. Paragraphs 8 to 10 relate to the power to deal with urgent cases. A case is urgent if the contravention results in or creates a serious threat to the safety of the public, to public health or to national security, or serious economic or operational problems for other postal operators or users. OFCOM can give a direction suspending or restricting the entitlement of the contravening person to provide postal services. In doing so, OFCOM may also impose conditions appropriate to protect users of the contravening person, including making payments for compensation. If there is a direction in an urgent case, an opportunity for making representations and for proposing remedial steps must be given as soon as reasonably practicable after making the direction. At the end of that period, OFCOM must determine whether there was a contravention and whether treating the case as urgent was justified. If so, then OFCOM may then confirm the direction. If not OFCOM must modify or revoke the direction.
271. Under paragraphs 11 to 14, OFCOM may give a direction to suspend or restrict the entitlement of a contravening person to provide postal services. OFCOM may give a direction under these paragraphs only if: (a) the contravening person has been or is in serious or repeated breach, (b) a previous attempt (through an enforcement notification or penalty) to secure compliance has failed and (c) it is appropriate and proportionate. A direction may impose conditions, including payments for compensation. Before giving a direction OFCOM must notify the contravening person, give an opportunity to make representations and propose remedying the situation, and must consider every representation. OFCOM must give one months minimum notice, except in urgent cases.
272. In relation to urgent cases or suspension or restriction of the entitlement of providing postal services, a person is guilty of an offence if it provides any service while it is suspended or in contravention of the restrictions imposed.
273. The duty to comply with regulatory requirements or requirements imposed by an enforcement notification, a suspension direction or a direction for urgent cases is owed to every person who may be affected by a contravention of it. A breach of that duty that causes loss or damage, or an act which intentionally causes the breach of that duty and results in loss and damages, is actionable. It is a defence for the contravening persons to show they took all reasonable steps and exercised all due diligence. Bringing proceedings for contravening the underlying regulatory obligation requires the consent of OFCOM.
|© Parliamentary copyright 2009||Prepared: 22 May 2009|