Posts Tagged ‘Public Sector’

A Supreme Effort for TUPE Case

An interesting case is developing in the world of TUPE. If you are involved in TUPE transfers of employees from the public sector then it’s certainly worth keeping an eye on.

The case concerns a group of employees who brought claims for unlawful deduction of wages.  They were initially employed by a local authority, and were transferred to a private sector employer under TUPE.

Their contracts of employment provided that their “terms and   conditions of employment will be in accordance with collective agreements negotiated from time to time by the National Joint Council for Local Government”. The employees argued that after their transfer, their private sector employer was bound by the provisions of collective pay agreements negotiated in the local authority sector, even where the collective agreement was negotiated after the date of transfer.

Well the case made it to the Supreme Court who, unable to decide on the case, has referred it to the European Court of Justice. If the European Court of Justice rules in favour of the claimants then it could have serious implications for employers who have transferred employees on the basis that they could negotiate their own pay agreements.

As is always the case don’t expect anything soon from the European Court of Justice. However, watch this space as this one has the potential to jump up and bite you at a later date.


Lord Hutton’s 27 Recommendations

It’s been another very busy day on planet pensions! As we mentioned last week the Independent Public Services Pensions Commission under Lord Hutton has issued it’s final report.

Professional Pensions have done an excellent summary of the 27 recommendations made by the Committee. You can click through to the article here.

In short Hutton has recommended a move to a Career Average Revalued Earnings Scheme for future service across the public sector. He is strongly of the opinion that promises made under the current structure should be protected. That means older longer serving employees will still get the promises they have been given if the government protects the past service element.

So the main impact will be felt by younger employees or those with little past service. Interestingly he has also recommended that future public servants should not be given access to Defined Benefit scheme so we probably have to look forward to some form of Defined Contribution arrangement for new joiners.

Like all these things the devil is in the detail. We’ll be reviewing the contents over the next few days and no doubt there’ll be further articles on the subject.

One thing is for sure that something has to change if the public service pension promises are to remain affordable for future generations. It is a brave government that has decided to grasp this particular nettle rather than, like their predecessors, bounce the problem down the line.

These reforms must also dovetail with the changes to the Basic State Pension to ensure a uniformity of approach. It’s going to be a busy time over the next few years.

As is always the case…….watch this space!


Hutton report on public sector pensions – final date set

The Treasury has confirmed Lord Hutton will publish the final report of the Independent Public Services Pensions Commission  on Thursday 10 March.

The report will lay out Hutton’s recommendations to government on “sustainable and affordable” pension arrangements, the Treasury said.

There is some talk about the relaxation of the rules on pension promises when employees are transferred out of the public sector. This is known as the “Fair Deal” regulations. If the combined political aim of The Big Society and Public Sector Deficit Reduction are to stand any chance of success these regulations need to be reviewed.

Those in the private and third sectors are not in a position to fund final salary benefit promises for employees who are transferred to them. Without some relaxation there will be less interest from organisations that the government needs to run these services in the future.

If, as rumoured, trades union pressure has led to the postponement of an increase in member contributions this will be disappointing. There clearly is a need to address the sustainability of public sector pension promises.  In the last week the CWU union brokered a deal at O2 where employees voted to increase their contributions from 6% to 10% of salary in order to keep a final salary scheme. If it’s possible in the private sector surely the public sector should follow suit.

It looks like it’ll be an interesting week next week. Watch this space!