Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Peston: My Lords, I thank the Minister for that answer, which was particularly enlightening. I assumed that the statement that he made during Report stage still held. He reassured your Lordships that the Government's preferred option was to sell AEA Technology as a whole. I had not thought that the Government were back-tracking on that.

What I find most helpful—I pause to look at the Minister when I say this to make sure that he nods in agreement—is that in all these cases the Secretary of State has an involvement. Let us take the simplest possible case: selling off the book drying section employing one person. If we were to say that it is fundamental to this Government's policies that book drying in the United Kingdom Atomic Energy Authority remains in the public sector, the Secretary of State would at least have a locus to do that. I take it that that is what the Minister has said. With that reassurance, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 1 [Transfer schemes: supplementary provisions]:

3.45 p.m.

Baroness Turner of Camden moved Amendment No. 2:

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

The noble Baroness said: My Lords, the Minister may feel that we have been over this ground before. Certainly we attempted to persuade him earlier in the Bill that further steps were necessary to provide protection for employees in the event of redundancy as a result of privatisation. The present amendment, as will be seen, includes an element of backdating in that it attempts to protect the rights of those involved in the sales of FSD (as I think it is called) and the sale of seven people to EMS Medical.

The Minister has always argued that this is an unnecessary amendment because the employees will have the protection of the TUPE regulations. That is absolutely true. The Minister has also said that before

30 Oct 1995 : Column 1286

changes could be made to contractual redundancy terms the agreement of the members or that of their unions would be required. There is wording to that effect included in the amendment before the House this afternoon.

However, as we have always pointed out, TUPE protects only at the point of transfer. Afterwards, changes can be made, and often are, frequently to the detriment of the employees. I received some further information since the last time that this issue was discussed. It shows exactly why employees are so concerned and why they feel that simply relying on TUPE will not give them sufficient protection.

I understand that 950 employees were involved in the sale by UKAEA to Procord Limited, a subsidiary of Johnson Controls Incorporated of Wisconsin, on 31st March 1995. The managing director of Procord wrote to the prospective new employees on 7th March saying:

    "Procord will take over and honour all your employment rights, including redundancy entitlements—and has no redundancy plans".

The managing director of UKAEA Services Division on 31st March said:

    "We are ... confident that the sale offers excellent prospects to our colleagues who are now joining Procord".

Procord's human resources director repeated on 27th July that there were no redundancy plans.

However, Procord announced 150 redundances to its ex-UKAEA workforce on 10th August, citing as the reason misleading assurances as to non-guaranteed work given by UKAEA during the sale. Despite the earlier assurances, Procord now say that it plans to worsen terms and conditions of employment, including the redundancy terms, when the current redundancy programme is complete.

The Procord employees, therefore, need the protection of their redundancy terms offered by this amendment. Making any redundancy exercise cover both Procord and UKAEA will ease the process, as there will be greater possibilities for redeployment; and, as we have said on past occasions, the redundancy agreement existing for UKAEA employees lays great emphasis on the need for redeployment.

For those reasons, I again put these amendments before the House, even though, as I indicated, we have already been over this course substantially before. But I must emphasise that feedback from employees through their unions shows that there is great concern about the prospects of redundancy following privatisation and a belief that once privatisation has taken place, the employees will cease to have the protection that they had under their former redundancy terms. I beg to move.

Lord Fraser of Carmyllie: My Lords, this is an issue which, although important, we have discussed both in Committee and at Report stage. I had hoped that on previous occasions I had succeeded in reassuring the noble Baroness that AEA Technology employees would have all the protections in respect of redundancy provided for by the TUPE regulations and that any modifications to contractual redundancy rights will require the consent of employees.

30 Oct 1995 : Column 1287

As I explained at Report stage, the width and retrospective effect of this amendment seemed to us entirely inappropriate. I repeat that our concern in the Bill is with the privatisation of AEA Technology and not with any other divestment that the authority has carried out or may carry out in the future under its existing powers. So far as concerns other divestments, the authority is in the same position as any other public enterprise. Notwithstanding what the noble Baroness said, I do not consider that there is an argument which justifies treating authority staff differently from other public servants. Indeed it would be inequitable to do so.

TUPE ensures that employees join their new employer on the same terms and conditions as they left their old one. As the noble Baroness previously suggested, it is the case that the new employer can change those terms and conditions with the employee's consent, but the same, of course, is also true of the old employer.

I cannot agree that the exceptional arrangements in this amendment are justified in the circumstances. It would be beyond the terms of the Bill to go over what Procord did or did not say. If it is intending to bring about redundancies or seek voluntary early retirement from employees, that is a matter for the company and not for me.

Baroness Turner of Camden: My Lords, I am not entirely surprised at the Minister's response, though I find it slightly disappointing. He says that there is no reason to treat these employees differently from any other employee. We made it clear in previous discussions on the Bill that we are talking of groups of people who went to work for a public authority—UKAEA—believing that it held the prospect of security for the future both in regard to pension provision and employment. Those hopes have been frustrated as a result of the Government's privatisation plans and therefore, through no fault of their own, those employees cease to have the element of security that they once had. That has been made even more clear by what is happening to Procord.

It was for those reasons that we felt that there was an obligation on the Government to make exceptional arrangements in regard to a group of employees whose security had been put at risk in their eyes as a result of government legislation and policy. However, we have failed yet again to convince the Minister that it is right and proper to accept the amendment. I regret that; but, at this late stage of the Bill, I have no alternative but to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 4 [Pensions]:

Baroness Turner moved Amendment No. 3:

Page 29, line 36, at end insert—
("(4A) No person who, in consequence of a transfer of an undertaking ceases to be an employee of the Authority (in this paragraph referred to as a "divested employee") and who immediately before ceasing to be an employee of the Authority is a participant in an Authority pension scheme, shall cease to be a participant in that scheme by reason only that he has ceased to be employed by the Authority.

30 Oct 1995 : Column 1288

(4B) No divested employee who, immediately before ceasing to be an employee of the Authority, is not a participant in such a pension scheme, but—
(a) is eligible to become such a participant; or
(b) would have become eligible to become such a participant on attaining an age or fulfilling a condition specified in the scheme;
shall be precluded from being or, as the case requires, becoming eligible for participation in that scheme by reason only that he has ceased to be employed by the Authority.
(4C) Sub-paragraphs (4A) and (4B) above shall have effect for transfers of undertakings occurring on or after 1 March 1995.").

The noble Baroness said: My Lords, we are revisiting this matter finally at Third Reading, mainly because the feedback we had from the organisations representing the staff is to the effect that they remain extremely concerned about the position of those who cease to be employed by the authority as a result of privatisation. The Minister will know that much of that anxiety centred upon what will happen in regard to pension rights.

It is true that, on Report, the Minister made some substantial concessions, particularly in regard to index linking. We are grateful for those and I emphasise that this afternoon. However, anxieties remain about those divested of employment rights other than under the transfer scheme provisions of the Bill.

The amendment would make entitlement retrospective to 1st March 1995. I am advised that two groups of employees were involved in sales on 31st March 1995. They are the facilities services division with 950 people involved in the sale to Procord and Harwell Dosimeters and seven people involved in the sale to EMS Medical Group. In each case a different non-index linked pension scheme was imposed.

The Government will no doubt claim, as they have done on previous occasions, that the pension packages are broadly comparable, which I understand to be the view of the Government Actuary. However, an independent actuary consulted by the unions disagreed, mainly because the GAD assumed an average rate of inflation of 5.5 per cent., whereas the experience of the 30 years from 1964 to 1994 was an average of 8.2 per cent.

The unions therefore believe that the people concerned have suffered a worsening of terms and conditions. While we all hope that inflation will not escalate, nobody can be sure. We therefore return to this issue in a final attempt to persuade the Government that it would be in everyone's interest—including taxpayers—for those people to remain in the UKAEA pension scheme. The Government argue that changing the terms of the sales would be a breach of faith with the purchasers. My information is to the effect that the purchasers were well aware of the unresolved pension issues at the time the sales were completed. I beg to move.

Next Section Back to Table of Contents Lords Hansard Home Page