COMMITTEE FOR EMPLOYMENT AND LEARNING
MINUTES OF PROCEEDINGS:
THURSDAY, 10 JANUARY 2002
ROOM 152, PARLIAMENT BUILDINGS
Present:
Mr Mervyn Carrick (Deputy Chairman)
Mr Roy Beggs MLA
Mr John Dallat MLA
Mr William Hay MLA
Mr Roger Hutchinson MLA
Mr John Kelly MLA
Mrs Mary Nelis MLA
Prof Monica McWilliams MLA
In Attendance:
Dr Andrew C Peoples
Ms Hilary Bogle
Mr Colin Jones
Mr Paul Stitt
Apologies:
Dr Esmond Birnie MLA (Chairman)
Mr Joe Byrne MLA
Mrs Joan Carson MLA
Meeting opened at 2.05pm in open session. Mr Carrick in the chair.
1. Apologies
Apologies are detailed above
2. Draft Minutes of 13 December 2001
Agreed. Proposed: Mr Dallat. Seconded: Mrs Nelis.
3. Matters Arising
Members noted details of members' attendance at Committee meetings for the 2001/02
session to date, which had been requested at the meeting on 13 December 2001.
4. Consultation on, the 'Transfer of Undertakings (Protection of Employment)
Regulations 1981 (TUPE)
Members considered the Committee's draft response to the Department of Trade and
Industry consultation on the Transfer of Undertakings (Protection of Employment)
Regulations 1981. Several amendments proposed by the Deputy Chairman were agreed.
It was also agreed that the Clerk should make any minor amendments necessary to
further improve readability, before issuing to the Department for Employment and
Learning (DEL) to meet their deadline of 11 January 2002. (Annex 1).
Action: Clerk
5. Correspondence
Members noted the letter from Ballymoney Borough Council regarding the Committee's
recent Inquiry into 'Education and Training for Industry'.
Members noted the letter from Queen's University, Belfast on the results of the
Research Assessment Exercise (RAE) 2001. Members agreed to forward a letter to
the Vice-Chancellor, congratulating him on the University's performance.
Action: Clerk
Members noted the correspondence from Learn and Grow, a charitable company working
with the unemployed, concerning the Taskforce on Employability and Long-Term Unemployment.
Members agreed to reply thanking them for the information, which would be considered
in the formation of the Committee's response to the Taskforce.
Action: Clerk
Members noted updated details on the Draft Equality Schemes and Screening Policy
Consultations from Further Education Colleges received to date by the Committee
Office. These were available in the Office for members' reference.
Members noted the letter from the Minister, updating the Committee on the implications
for Northern Ireland of the Blunkett Package, which was initially announced at
the end of 2000, to improve the salaries and terms and conditions of staff in
higher education.
Members noted the Minister's letter concerning the Kinawley Integrated Teleworking
Enterprise (KITE), and agreed that they should be kept fully informed by DEL on
this matter.
Action: Clerk
2:20pm Prof McWilliams joined the meeting.
Members noted the Minister's reply to Mr Beggs concerning the geographical take-up
of Individual Learning Accounts in Northern Ireland.
Members considered the organisation chart detailing the senior management structure
in DEL. It was noted that Mr I Walters, Chief Executive of the Training and Employment
Agency, had recently been seconded to Action Mental Health. Members directed the
Clerk to determine the salary arrangements for the secondment and whether Mr Walters
would be replaced in DEL. Clarification should also be sought as to why Further
Education and Learning Policy Division should require a Grade 6 Post.
Action: Clerk
2:30pm Mr Beggs joined the meeting.
6. Briefing from DEL officials on their bids to the December 2001 Monitoring
Round
Members were briefed by Mr G. O'Doherty, Finance and European Division, and
Mr J. Russell, Financial Planning. Following a short presentation, the following
issues were debated:
-
How the current financial situation in Lisburn College of Further Education
had occurred and how this would affect the College in the future;
-
The bid for £660,000 to make up the shortfall caused by income from Training
Centres accruing to Further Education Colleges;
-
Why the Department had surrendered £10.5m in Student Loans Capital, partly
due to the reduction in the expected level of new loans take-up;
-
Clarification of DEL's easements in the financial year to date;
-
Why £17m of the total New Deal budget of £43m had been surrendered
in the year to date;
-
An update on the slippage in planned management development projects;
-
An explanation as to why only one claim had been made to date for the childcare
subsidy in the New Deal for Lone Parents programme;
-
Why almost £11m had been surrendered from the Jobskills budget in the
financial year to date; and
-
The implications of slippage in the Springvale Campus project.
3:30pm Mr Kelly left the meeting.
Following the briefing, members debated their response on the December Monitoring
Round. It was agreed that this should be approved by the Chairman and Deputy Chairman
for issue to the Minister on Monday 14 January 2002, as the Executive was to consider
this issue on Tuesday 15 January 2002.
Action: Clerk
The Clerk was also directed to ask the Department when information on bids for
the February 2002 Monitoring Round would be available.
Action: Clerk
7. Correspondence (contd.)
Members noted the letter from DEL concerning the delay in the response to the
Committee's Report on the Inquiry into Education and Training for Industry, which
had been due in mid-December 2001.
Members noted the letter from the Department offering a presentation on its role
in administering European Funding. Members agreed that this should be scheduled
for a future meeting.
Action: Clerk
8. Legislation
Members noted the consultation on the Department's draft Statutory Rule to amend
the powers of governing bodies of institutions of further education. Members agreed
that a response should be drafted for consideration at a future meeting.
Action: Clerk
Members noted the Department's amendment concerning Fixed Term Workers Regulations
to enable Northern Ireland to implement the European Community Directive on Fixed
Term Workers to ensure parity with Great Britain.
9. Any Other Business
Mr Dallat asked for those issues that had not been covered before the Christmas
Recess to be included in a Forward Work Programme. Members agreed that many issues
remained outstanding from DEL and that dates of receipt should be determined before
such a Programme could be confirmed.
Members discussed the recent press article on the closure of part of Stranmillis
Training College for health and safety reasons. Members agreed to seek further
information on this matter in particular, and on the whole issue of the maintenance
of further and higher education institutions.
Action: Clerk
Members noted that an informal meeting had been arranged between the Chairman,
Deputy Chairman, Clerk and the new Minister for Monday 14 January 2002.
9. Date and Time of Next Meeting
On Thursday 17 January 2002 at 2:00pm in Room 152 Parliament Buildings, to include
a briefing from the Minister on the Taskforce on Employability and Long-Term Unemployment.
This would be preceded by a lunchtime meeting with the Association of Northern
Ireland Colleges (ANIC) to be held at 12:15pm in the Private Members Dining Room,
followed by lunch at 12:30pm in the Members Dining Room.
The Chairman adjourned the meeting at 4:05pm.
Mr Mervyn Carrick, MLA
Deputy Chairman, Committee for Employment and Learning
17 January 2002
ANNEX 1
Northern Ireland Assembly
Committee for Employment and Learning
Response to the Department of Trade and Industry Consultation Document on the
Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE)
The Committee for Employment and Learning welcomes the opportunity to respond
to the consultation document initially issued by the Department of Trade and Industry
on the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE).
The Committee also welcomes this consultation document as a benchmark to inform
the Department for Employment and Learning and the Executive's deliberations on
how best to take forward the TUPE Regulations in the Northern Ireland context.
The Committee's views are as follows:
1. Application of TUPE in the Public Sector
A great deal of uncertainty appears to have developed around the operation
of TUPE in recent years, with particular reference to the public sector outsourcing
market. This uncertainty has created significant commercial problems for businesses
involved in outsourcing. It is therefore important that this review ensures that,
in the interests of outsourcing remaining an attractive solution to providing
commercial support services, it operates within a commercial and legal environment
which provides -
Greater consistency and clarity needs to be ensured in the application of the
Transfer of Undertakings (Protection of Employment) Regulations 1981.
The current problem is as outlined by the CBI;-
"The key difficulty is that contracts originally won by a contractor on a
TUPE basis may be re-let on a non-TUPE basis. This can result in the original
provider being left with large and unanticipated bills for redundancies. Contractors
argue that there is currently an incentive for some clients to seek to re-let
contracts on a non-TUPE basis in order to bring in a new contractor with new staff
hired on lower terms and conditions - and so generating cost savings. But this
in turn leads to an overall increase in the cost of outsourced services for clients
across the economy, as contractors need to price in the risk of future redundancy
payments into their initial bid."
"This problem with the TUPE regulations is particularly acute in relation
to public sector contracting. In the private sector it is always open to the contracting
company to seek an indemnity with the client company to protect against the cost
of redundancies caused by re-let on a non-TUPE basis. Such indemnities are, however,
almost never available in the public sector. The cost to contractors of redundancies
in the public sector is also typically higher as public sector staff tend to have
longer service and more generous contractual redundancy terms."
The Cabinet Office's best practice guidance 'Staff Transfers in Public Sector'
attempts to deal with this, however, it is not statutory. The Committee would
therefore urge consideration of the introduction of legal measures to underpin
these policies.
Although there are some merits in the proposed approach to 'service provision
changes' in that it would include all service contracts in the scope of the regulations
and would potentially provide a degree of certainty for both the providers of
outsourced services and their clients. It would also minimise the risk to both
parties of unexpected redundancy costs as there would be a much reduced chance
of these costs ever crystallising. There are a number of disadvantages, which
could outweigh the potential advantages -
-
Lack of flexibility for clients - in order to maintain a high quality
of service it may sometimes be necessary for the employees of the current contractor
to be replaced e.g. where the intellectual capital of the workforce rather than
the quality of management is likely to play a crucial role in the delivery of
the service.
-
It could result in professional services such as consulting or legal advice
being covered by the regulation. If a professional services firm has a dedicated
group of staff who work on the premises of a particular client, then those staff
may be judged to be an economic entity, and any loss of the contract to a different
firm could be judged to be a TUPE transfer.
-
New legal uncertainty could result, as it is not clear what interpretation
the Courts would place on the term "service contract". The position
of contracts which supply both goods and services would be unclear e.g. a contract
for the servicing of aircraft which involves both the provision of parts and engineering
staff. It is vital that this is fully clarified.
2. Pension Rights
When considering the issue of pension rights in relation to TUPE, consideration
should be given to the following:-
(i) Allowing transferees the ability to switch freely between defined benefit
and contribution schemes, and between contracted-out and contracted-in schemes.
(ii) Should not risk undermining transfers by imposing excessive costs, or
used to ratchet up levels of private sector pension provision.
(iii) Be simple to understand and administer, avoiding any need for actuarial
certification.
(iv) Allow flexibility to agree the fine details on pensions after the transfer
so as to avoid disproportionate delays.
(v) The amended regulations should state explicitly that transferees could
legitimately vary pension benefits subsequent to the transfer for reasons unconnected
with it, in order to allow employers the ability to harmonise pension provision.
(vi) Incorporating into the amended regulations that existing public sector
employees in a public sector pension scheme should have the right to remain part
of that pension scheme irrespective of any transfers under TUPE.
3. The better notification of employees of their TUPE rights
(i) There should be a requirement within the revised regulations to ensure
that there is effective release of information; full disclosure of all policies
and protection; effective measures for pension handling; or the effective transfer
of equality obligations.
(ii) The revised regulations should set out clearly at what stage of the process
the transfer of the information would take place. The timing of the transfer of
information is particularly important to ensure confidentiality of information
and should only be made available when the bidding process has reached a select
number of bidders.
(iii) All transfer information should be made available to the individuals
concerned to ensure accuracy and validity of the information prior to the actual
transfer taking place.
(iv) The review needs to address how employees facing transfer can have a guarantee
for the length of the contract and succeeding contracts of the preservation of
their terms, conditions and entitlements.
4. Application of the legislation in relation to insolvency proceedings
The Committee would support this proposal and acknowledges the intent to mix
employee protection and business flexibility by protection for employees at least
equivalent to that provided for in situations covered by the EC Insolvency Protection
Directive and the provision that employers and employee representatives, may,
exceptionally, agree changes to terms and conditions of employment by reason of
the transfer itself; provided that this is in accordance with national law and
practice and with a view to ensuring the survival of the business and thereby
preserving jobs.
5. Changes to the terms and conditions of employment of affected employees
(i) There are explicit 'get-out' clauses (relating to Economic, Technical and
Organisational (ETO) reasons or insolvency processes) in the proposals that allow
TUPE to be set aside under certain conditions. Given the equality benefit from
the proposals and general principle of TUPE it follows that these exceptions should
be carefully set out to avoid abuse by rogue employers.
(ii) UNISON thought that consideration should be given to setting up a mechanism,
which would examine whether genuine economic and technical or organisational reasons
existed in the event of an employer proposing changes to TUPE transferred conditions.
This would in effect be a compulsory arbitration process (CBI).
(iii) There is a need for a clearer definition of ETO.
Conclusions
(i) The Department should clearly quantify the impact of the proposed amended
TUPE Regulations on the public sector in Northern Ireland.
(ii) The Department must clearly set out the discretion Northern Ireland has
under the EC Directive to inform future consideration of this issue.
(iii) The Department should undertake a preliminary assessment setting out
and quantifying the impact of TUPE in the past and consult those affected by TUPE,
both employees and employers. For example, UNISON, during their evidence session,
outlined that they considered that standards had slipped due to privatisation
in the health sector. More specifically the Committee seeks a brief on the implications
of TUPE on the incorporation of Further Education Colleges (FEC) and the merger
of Training Centres with FECs.
(iv) The Committee would strongly recommend the drawing up of detailed guidelines
in handling TUPE incorporating model contract clauses, this would be invaluable
for employers, employees and legal advisers alike. This should reduce/avoid the
potential for cases having to be settled through costly procedures.
(v) It is important that tendering is properly conducted to avoid the problems
of the past e.g. low bidders not being able to fulfil their contracts. This in
turn results in a waste of limited public sector money.
(vi) The Committee do not wish these regulations to be seen as 'cost cutting'
at the employees' expense. Neither do they want to see the employers not having
incentives to improve service quality and improve efficiency through good management
practice, introduction of technology etc. The TUPE Regulations must not dissuade/prevent
continuous improvement.
(vii) In order to establish the scale of impact in Northern Ireland, consideration
should be given to carrying out a Workplace Employee Regulations Survey (WERS).
This would be particularly important given that the analysis in the survey carried
out in Great Britain noted that small firms were much less likely to be affected
and firms in Northern Ireland are on average smaller than those in Great Britain.
(viii) The Committee endorses the proposals to underpin the existing best practice
guidance in the public sector with legal force. This should ensure uniformity
of practice by public sector clients when dealing with staff transfer issues.
Consideration should be given to a new requirement under the Local Government
Act that commercial indemnities covering redundancy costs should be made available
to contractors (as is the case in the private sector).
(ix) Given the significant equality implications in administrative related
transfers, greater uniformity of policies and procedures is needed across the
public sector employers in Northern Ireland.
(x) The issue of protection of pension rights is particularly important given
the scale of the public sector in Northern Ireland (31.9% of employment in Northern
Ireland is within the public sector).
(xi) The regulations do not contain any specific consideration of gender. This
does not preclude the potential (in the absence of protection) for TUPE transfers
to disadvantage women significantly more than men. Given that -
(a) The categories of employment most affected by transfers (including from
the public sector), have a high level of female employment, e.g. catering, cleaning,
clerical.
(b) The potential for a transfer to worsen an individual's conditions depends
on their vulnerability in the labour market. This vulnerability is strongly associated
with those receiving low pay and/or other disadvantage, women have a higher representation
in this group.
(xii) The Legislation should be easily understood by all.
Mr Mervyn Carrick MLA
Deputy Chairman
10 January 2002
