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Lord Haskel: My Lords, I thank the Minister for that reply and for putting on the record that support for employee involvement is complete. I accept that he is satisfied that the management is committed to employee involvement. This is perhaps not the place to discuss styles of management. The Minister did not reply to the point in relation to the European directive and that, too, may be a topic for another occasion. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 19 to 21 not moved.]

Baroness Turner of Camden moved Amendment No. 22:

Page 15, line 25, at end insert—


.—(1) If any employee of the Authority is transferred to a new employer by a transfer scheme or otherwise and is declared redundant—
(a) the Authority's redundancy rules and benefits applicable to that employee at the date of the transfer shall apply unless the trade unions or other bodies representing the employees transferred by the transfer scheme have agreed to their modification for such employees; and
(b) the redundancy rules shall apply as if the Authority were the employer and all employees transferred from the Authority's employment by transfer schemes were employees of the Authority.

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(2) This paragraph shall have effect for employees transferred on or after 1 March 1995.").

The noble Baroness said: My Lords, before moving Amendment No. 22 I should like to make a short statement, bearing in mind that this is the first opportunity I have had to do so. In view of a report which appeared in a Sunday newspaper I should like to assure the House that when I speak from this Dispatch Box I do so on behalf of the Labour Opposition and for nobody else. I am sure that that is well understood by the Minister and his colleagues.

Reverting to Amendment No. 22, at Committee stage I moved an amendment in rather similar terms to this. However, there is a slight extension to the wording here. I said at the time that I would look very carefully at what the Minister said and would consult with the unions of those most concerned. I welcome the assurances that the Minister then gave about the application of the TUPE regulations, but there are still some major concerns. It is for that reason that I am returning to the matter on Report.

The present amendment seeks to protect the redundancy rights of those transferred out, first, by preserving the UKAEA redundancy rules and, secondly, by dealing with redundancy across the whole current UKAEA and making the authority liable to employees for the payments. Backdating the matter to March 1995, as the new wording suggests, protects the 950 ex-Facilities Service Division employees and the seven sold to EMS Medical on 31st March. Therefore, there is an extension of the last amendment.

Many employees fear that there will be more redundancies after privatisation and that a new employer will force them to accept worse redundancy terms. Since privatisation of the authority's Facilities Service Division on 31st March, the new owners have already declared 150 redundancies of the 950 staff concerned. AEA Technology is, I am informed, making more than 400 redundant in order to meet a profit target of £21 million in 1995-96. As is now unfortunately so usual, private employers seek to make profits by cutting staff and making those who remain work harder and sometimes longer hours. A substantial proportion (25 out of 60)unresolved surplus staff at 10th August are scientists and engineers and the rest are administrators, mostly accountants. UKAEA is failing to apply its redundancy agreement by not reducing overtime, using contractors and recruiting.

The Minister may well repeat his assurance today about the application of TUPE. But the problem here is that TUPE regulations only protect at the point of transfer. The unions are worried about subsequent changes to terms. Even without changing the terms, the scope for redundancy is much greater with smaller, private firms because obviously there is less scope for redeployment. I am sure that the Minister recognises that there are deep and genuine concerns here. Even highly qualified people now often have difficulty, particularly after a certain age, in getting alternative employment. It may be quite a time before such people can be employed elsewhere. If their redundancy arises, it will do so directly from the plans of the Government and their privatisation intentions. It seems to me that

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such staff are entitled to much greater assurances as to their future than might otherwise have been the case. I beg to move.

4.30 p.m.

Lord Fraser of Carmyllie: My Lords, when we discussed this issue in Committee, I assured the noble Baroness that AEA Technology employees will have all the protections in respect of redundancy provided by the TUPE regulations and that modifications to contractual redundancy rights will require the consent of the employees. As I understood her remarks, she accepts that that was a correct statement of the law. I am happy to repeat those assurances anyway.

This amendment not only has a wider, but also a retrospective effect. It would apply to all authority employees transferred to a new employer from 1st March 1995. In our view that is entirely inappropriate. The Bill is intended to deal with the privatisation of AEA Technology, and not with any other divestment that the authority may carry out under its existing powers. As regards the other divestments, the authority is in the same position as any other public enterprise. While we have stressed that this is "a people's business", I have heard no argument to justify treating authority staff differently from other public servants and indeed it would be inequitable to do so.

I am a little concerned that the noble Baroness, notwithstanding the assurance I gave her that TUPE would apply, should think that that might not be sufficient protection. TUPE ensures that employees join their new employer on the same terms and conditions as they left their old employer. The new employer has just the same rights as the old one; they can change an employee's terms and conditions of service with the employee's consent. That consent can either be given by each employee or, where there is a collective agreement, by the union on their behalf.

It is true that AEA Technology has already announced that some slimming down is likely to be necessary. The means by which it achieves that is a matter for the company. I know that it intends to redeploy staff and also to use voluntary means to reduce numbers where that is considered appropriate. To provide for exception arrangements, as the noble Baroness's amendment would do, does not seem justified, particularly against the background of the very real security which is in any event provided for employees in law.

Baroness Turner of Camden: My Lords, I thank the Minister for that response. As I expected, he has referred again to the TUPE regulations. As I said in moving the amendment, the problem is that I understand the employees concerned and their unions still feel that those regulations, in the particular circumstances of the privatisation, do not really give them as much security as they would like. Therefore, they want the amendment that I have put before your Lordships this afternoon and the retrospective element included in subsection (2) of the amendment.

As I indicated, although it is true that the TUPE regulations apply at the point of transfer, so that the individuals concerned have at that time the full

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protection of their existing contracts of employment, there is not that protection thereafter. Therefore, people who joined the service originally expecting a considerable degree of security of employment may very well lose it as a result of privatisation. It is for that reason that it was felt necessary to bring these amendments once more before your Lordships' House. However, I do not expect that any further assurances can be obtained from the Minister today. We have done our best to ensure that people are protected in the future. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2 [Successor companies]:

[Amendments Nos. 23 to 25 not moved].

Schedule 4 [Pensions]:

Baroness Turner of Camden moved Amendment No. 26:

Page 29, line 3, leave out ("sub-paragraphs (2) and (4)") and insert ("sub-paragraph (2)").

The noble Baroness said: My Lords, I am returning to these amendments again, as I did with the previous amendments, in the light of the discussion we had in Committee. The group of amendments with which we are concerned here is to do with pension entitlement. The amendments provide for the rights of people to stay in a UKAEA scheme who are divested by that company other than under the transfer scheme provisions of the Bill. They make that arrangement retrospective.

We had a detailed discussion in Committee when the Minister strongly put the Government's view that in the event of privatisation people could not opt to remain in a Civil Service scheme but that TUPE required comparable—that is to say, not less favourable provisions—to be made in respect of pensions. On our side we strongly pressed the point that that did not automatically mean that pensions in payment, for example, would be index-linked. Indeed, the Minister confirmed that that might well not be so.

He stressed that a different mix of benefits might be provided. I have to say that, from the soundings we have taken, index-linking remains a very strong concern on the part of those not directly involved. I understand that it is envisaged that index-linking up to 5 per cent. per annum is likely to be offered in line with recent pension regulations. However, that does not protect pensions in times of high inflation, which we may hope we shall not see again but about which no one can be sure.

I have received details of the present arrangements from the unions concerned. As with public service schemes generally, they are good. In particular, the index-linking of pensions in payment is guaranteed. As I said at Committee, people often enter public service with the idea that such employment is likely to be steady and secure, with good pension arrangements including indexation. In return for that they will often sell their services more cheaply than they would otherwise do in the private sector. They are prepared, in a sense, to barter away immediate gain in return for added security. However, now in middle age when they may not find it so easy to secure a reasonably good alternative job, they discover that the security of their pension provision has

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been put at risk through no fault of their own, but simply because of government policies in relation to privatisation.

I take the view that in those circumstances it is not appropriate for the Government simply to rely on the argument about what is usual in the private sector. There is an obligation to look after the long-term interests of the people who have been displaced from the public sector in which they had expected to spend their working lives. Unlike the Government, I do not despise those who seek security for themselves and their families as distinct from taking their chances in an increasingly uncertain private market. It seems to me that that is a responsible attitude to life rather than the reverse. If the Government rob people of that certainty, there is an obligation to compensate them in some way by taking appropriate steps to continue the safeguards as far as possible.

In Committee my noble friend Lord Clinton-Davis suggested to the Minister that he should look at what was done in relation to railway pensioners at the time of the Railways Act. I was involved in discussion of that legislation to some degree and my recollection is that in the end the Government made substantial concessions to railway pensioners, including the guarantee that the Government would stand behind the pensioners' entitlement. There is a section in that Act specifically to protect employees. I do not know whether the Minister has been able to think again about what was said in Committee, but I can assure him that the unions representing the workforce still feel strongly about the situation and it is in the light of that that we have tabled this series of amendments. I speak not only to Amendment No. 26, but to the other amendments in the group. I beg to move.

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