Postal Services Bill

House of Commons

Session 2010 - 11
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Other Bills before Parliament

Postal Services Bill

Postal Services Bill
Part 1 — Restructuring of Royal Mail group
1

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, including provision for a special administration regime; 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
Removal of existing statutory restrictions on ownership
1
Removal of restrictions on ownership of Royal Mail Holdings plc etc
(1)
Sections 65 to 67 of the Postal Services Act 2000 (which contain restrictions on
5
the issue and transfer of shares and share rights in Royal Mail Holdings plc and
its relevant subsidiaries) are repealed.
(2)
But see section 4 of this Act (which imposes restrictions on the issue and
transfer of shares and share rights in a Post Office company etc).
Ownership of the Royal Mail
10
2
Report on decision to dispose of shares in a Royal Mail company etc
(1)
This section applies where the Secretary of State—
(a)
has decided to undertake a particular kind of relevant disposal, or
(b)
has decided that another person may undertake a particular kind of
relevant disposal.
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(2)
As soon as reasonably practicable after making the decision, the Secretary of
State must lay before Parliament a report on the proposed disposal.

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Part 1 — Restructuring of Royal Mail group
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(3)
The report must state—
(a)
the kind of relevant disposal intended to be undertaken, and
(b)
the expected time-scale for undertaking it.
(4)
In this Part “relevant disposal” means—
(a)
the issue or transfer of shares in a company the effect of which is to
5
reduce the proportion of a Royal Mail company owned by the Crown,
or
(b)
the issue or transfer of share rights to a person the effect of which would
be, if the shares to which the share rights relate were issued or
transferred to the person, to reduce the proportion of a Royal Mail
10
company owned by the Crown.
(5)
In this Part “Royal Mail company” means a company that—
(a)
provides a universal postal service, and
(b)
is or has at any time been in the same group as—
(i)
the original holding company, or
15
(ii)
another company that is or has at any time been a Royal Mail
company.
3
Employee share scheme
(1)
The Secretary of State must ensure that arrangements are made, before the time
at which the first relevant disposal is made in relation to a Royal Mail
20
company, for the establishment of an employee share scheme.
(2)
Those arrangements must secure that if at any time the proportion of the
company owned by the Crown is reduced to nil, the proportion of the company
owned by or on behalf of the employee share scheme is at that time (or has
before that time been) at least 10%.
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(3)
If any shares or shares rights have been transferred under the employee share
scheme to beneficiaries of the scheme, the shares or share rights are to be
regarded for the purposes of subsection (2) as if they are still owned by or on
behalf of the scheme.
(4)
“Employee share scheme” means a scheme for encouraging or facilitating the
30
holding of shares or share rights in the company (or companies in the same
group as the company) by or for the benefit of persons who are or include
employees of the company.
Ownership of the Post Office
4
Restrictions on issue and transfer of shares and share rights in a Post Office
35
company etc
(1)
No disposal of the Crown’s interest in a Post Office company may be made
other than a disposal that—
(a)
is made pursuant to a direction under subsection (2), or
(b)
is authorised under subsection (3).
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(2)
The Secretary of State may—
(a)
direct a Post Office company (if it is wholly owned by the Crown) to
issue shares or share rights to a relevant mutual, or

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Part 1 — Restructuring of Royal Mail group
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(b)
direct a company wholly owned by the Crown to transfer shares or
share rights in a Post Office company to a relevant mutual.
(3)
A disposal of the Crown’s interest in a Post Office company is authorised
under this subsection if—
(a)
the disposal is by way of an issue or transfer of shares or share rights in
5
a Post Office company to a relevant mutual, and
(b)
the Secretary of State has approved the issue or transfer.
(4)
No disposal of a relevant mutual’s interest in a Post Office company may be
made other than a disposal to—
(a)
another relevant mutual,
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(b)
the Secretary of State or the Treasury (or a nominee of either of them),
or
(c)
a company wholly owned by the Crown.
(5)
Any disposal in contravention of subsection (1) or (4) has no effect.
(6)
For the meaning of “Post Office company” and “relevant mutual”, see sections
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6 and 7.
(7)
In this section any reference to a disposal of a person’s interest in a Post Office
company is to—
(a)
the issue or transfer of shares in a company the effect of which is to
reduce the proportion of the Post Office company owned by the person,
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or
(b)
the issue or transfer of share rights to a person the effect of which would
be, if the shares to which the share rights relate were issued or
transferred to the person, to reduce the proportion of the Post Office
company owned by the person.
25
5
Report on transfer of interest in a Post Office company to a relevant mutual
(1)
This section applies where the Secretary of State—
(a)
has made a direction under section 4(2) (direction to issue or transfer
shares or share rights in a Post Office company to a relevant mutual), or
(b)
has granted an approval under section 4(3) (approval of such issue or
30
transfer).
(2)
As soon as reasonably practicable after making the direction or granting the
approval, the Secretary of State must lay before Parliament a report on the issue
or transfer in question.
(3)
The report must—
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(a)
give details of the issue or transfer (including when it is expected to
occur),
(b)
name the body to whom shares or share rights are to be issued or
transferred, and
(c)
explain how that body meets the conditions set out in section 7.
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6
Meaning of “Post Office company”
(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—

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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 wholly owned by the Crown.
(3)
An order under subsection (1) may not be amended or revoked.
(4)
An order under section 91 that appoints a day for the commencement of section
1 (removal of restrictions on ownership of Royal Mail Holdings plc etc) may
10
not be made unless Post Office Limited (registered number 02154540) has been
designated under subsection (1).
7
Meaning of “relevant mutual”
(1)
In section 4 “relevant mutual” means a body in respect of which the Secretary
of State considers that conditions A to C are (and will continue to be) met.
15
(2)
Condition A is that the purpose (or main purpose) for which the body exists is
to act for the public benefit by promoting the use by the public of services
provided by a Post Office company or at its post offices.
(3)
Condition B is that the members of the body are—
(a)
persons who have an interest in the use by the public of such services
20
(including employees of the Post Office company and other persons
engaged in the provision of its post offices), or
(b)
persons who act on behalf of, or represent, persons within paragraph
(a).
(4)
Condition C is that the body has in place arrangements for the prevention of
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disposals of property or rights by the Post Office company that would be
inconsistent with the purpose (or main purpose) for which the body exists.
Transfer of property etc
8
Transfer schemes
(1)
The Secretary of State, or the original holding company (if it is wholly owned
30
by the Crown), may make one or more transfer schemes.
(2)
A “transfer scheme” is a scheme for the transfer of property, rights or liabilities
(or the creation of interests, rights or liabilities)—
(a)
between companies within subsection (3), or
(b)
between—
35
(i)
a company within subsection (3), and
(ii)
the Secretary of State or the Treasury (or a nominee of either of
them) or a company wholly owned by the Crown.
(3)
A company is within this subsection if—
(a)
it is the original holding company or a subsidiary of that company, and
40
(b)
it is wholly owned by the Crown.
(4)
A transfer scheme made by the original holding company has effect—

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Part 1 — Restructuring of Royal Mail group
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(a)
only if approved by the Secretary of State, and
(b)
subject to any modifications made by the Secretary of State.
(5)
The Secretary of State must consult the original holding company—
(a)
before making a transfer scheme, and
(b)
before making any modifications of a transfer scheme made by the
5
company.
(6)
The Secretary of State may direct the original holding company (if it is wholly
owned by the Crown) to make a transfer scheme in accordance with the
direction.
(7)
Schedule 1 contains further provision about transfer schemes.
10
(8)
Nothing in that Schedule is to be read as restricting the provision that may be
contained in transfer schemes.
(9)
A company within subsection (3) must provide the Secretary of State with any
information or other assistance that the Secretary of State may reasonably
require for the purposes of, or in connection with, the exercise of any power
15
under this section or that Schedule.
(10)
That duty overrides any contractual or other requirement to keep information
in confidence.
(11)
That duty is enforceable in civil proceedings by the Secretary of State—
(a)
for an injunction,
20
(b)
for specific performance of a statutory duty under section 45 of the
Court of Session Act 1988, or
(c)
for any other appropriate remedy or relief.
9
Transfer of employees otherwise than under transfer scheme
(1)
This section applies if an agreement between companies within subsection (3)
25
provides for the transfer from one to the other of rights and liabilities under
contracts of employment.
(2)
This section also applies if—
(a)
employees of a company within subsection (3) (“company A”) are
provided to another company within that subsection (“company B”),
30
(b)
an agreement between the companies provides for the employees to
cease to be provided to company B, and
(c)
company B intends to employ the employees.
(3)
A company is within this subsection if—
(a)
it is the original holding company or a subsidiary of that company, and
35
(b)
it is wholly owned by the Crown.
(4)
At any time before the agreement comes into force, the Secretary of State
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
40
agreement, and
(b)
in a case within subsection (2), designate any employee of company A
who is provided as mentioned in subsection (2)(a).

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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 apply in relation to—
(a)
the transfer of designated contracts of employment, and
5
(b)
the cessation of the provision of designated employees to company B,

whether or not the agreement would otherwise be regarded for the purposes
of those regulations as giving rise to a relevant transfer.
(7)
Where by virtue of the agreement a designated employee of a company within
subsection (3) (“the transferor”) becomes an employee of another company
10
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
(b)
the transfer to the transferee is not to be treated as a break in service.
10
Taxation provisions relating to re-structuring
15
Schedule 2 contains taxation provisions.
Supplementary provisions
11
Annual report on post office network
(1)
A Post Office company must send to the Secretary of State each year a report
on its network of post offices.
20
(2)
The report must give details of—
(a)
the number and location of the company’s post offices,
(b)
the postal services, the services provided under arrangements with a
government department and the other services that are provided at
those post offices, and
25
(c)
the accessibility of those post offices to users of those services.
(3)
The report must, in particular, provide information about the accessibility of
the company’s post offices to—
(a)
individuals living in rural areas,
(b)
individuals living in urban areas,
30
(c)
small businesses,
(d)
disadvantaged individuals,
(e)
individuals with low incomes,
(f)
individuals with disabilities, and
(g)
elderly individuals.
35
(4)
The report must contain such other information as the Secretary of State may
from time to time require.
(5)
The Secretary of State must lay a copy of the report before Parliament.
12
Directions
(1)
This section applies to directions under this Part.
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(2)
A direction must be in writing.
(3)
A direction may be varied or revoked by a further direction.
(4)
A person to whom a direction has been given has a duty to comply with it.
(5)
That duty is enforceable in civil proceedings by the person by whom the
direction was given—
5
(a)
for an injunction,
(b)
for specific performance of a statutory duty under section 45 of the
Court of Session Act 1988, or
(c)
for any other appropriate remedy or relief.
Interpretation
10
13
Ownership of companies
(1)
This section applies for the purposes of this Part.
(2)
References to ownership of a company are to ownership of its issued share
capital.
(3)
References to ownership of a company include indirect ownership of it.
15
(4)
References to the reduction of the proportion of a company owned by the
Crown include a reduction to nil.
(5)
For the purposes of determining the proportion of any company owned by the
Crown, property and rights of the Secretary of State or the Treasury (or a
nominee of either of them) are to be regarded as property and rights of the
20
Crown.
14
Part 1: general interpretation
(1)
In this Part—
“agreement” means agreement in writing,
“company” means any body corporate,
25
“debt securities” means any instrument creating or acknowledging
indebtedness which is issued by a company (including, in particular,
debentures, loan stock, bonds and certificates of deposit),
“the original holding company” means the company that was nominated
under section 62 of the Postal Services Act 2000 (transfer of property etc
30
to nominated company),
“post office” means premises in the United Kingdom from which postal
services, or services provided under arrangements with a government
department, are provided directly to the public,
“Post Office company” has the meaning given by section 6,
35
“relevant disposal” has the meaning given by section 2,
“Royal Mail company” has the meaning given by section 2,
“securities”, in relation to a company, includes—
(a)
shares, debt securities and other securities of the company
(whether or not constituting a charge on the assets of the
40
company), and