Select Committee on Delegated Powers and Deregulation Nineteenth Report


Employment Relations Bill

Letter from the Parliamentary Clerk, Department of Trade and Industry
    Lord Alexander has written to the Lord Simon about the Government amendment inserting a new clause after Clause 32 which had been tabled for consideration during the second day of Committee. At Lord Alexander's suggestion the amendment was not moved at the appropriate moment in Committee thus giving the Delegated Powers Committee an opportunity to consider the amendment.

    The Department has prepared a short note which may assist the Committee in its consideration of the proposed Government amendment.

    17 June 1999

Memorandum by the Department of Trade and Industry

Government Amendment

After Clause 32, insert the following new Clause -

     (".-(1) This section applies where regulations under section 2(2) of the European Communities Act 1972 (general implementation of Treaties) make provision for the purpose of implementing, or for a purpose concerning, a Community obligation of the United Kingdom which relates to the treatment of employees on the transfer of an undertaking or business or part of an undertaking or business.

     (2) The regulations may make the same or similar provision in relation to the treatment of employees in circumstances other than those to which the Community obligation applies (including circumstances in which there is no transfer, or no transfer to which the Community obligation applies).")

The Government wishes to take a power to enable Regulations under the European Communities Act 1972 to be made which would apply the provisions of the EC Acquired Rights Directive in circumstances other than those to which the Directive applies. It would thus enable the successor to the current Transfer of Undertakings (Protection of Employment) Regulations 1981 (SI 1794) to be applied to a wider range of circumstances than covered by the Directive, when those new Regulations are introduced following consultation.

These Regulations are designed to safeguard employees' rights when the business in which they work changes hands between employers. The intention is to replace them in order to improve their operation, following the negotiation, under last year's UK Presidency, of a revision of the Directive itself. Detailed proposals are being drawn up, and there have been informal discussions with bodies representing employers and employees, and other interests, particularly those involved in the application of the legislation to the contracting of services. There will be public consultation later this year, but it is apparent from the discussions which the Government has already had with business and other interests that existing powers under section 2(2) of the European Communities Act would be insufficient to achieve some of the changes they may ultimately wish the Government to make.

In particular, existing powers would not allow extension of the scope so as to bring within the coverage of the Regulations individuals who would not be covered by the Directive. Business interests as well as employee representatives are seeking such an approach in order to ensure that the Regulations have a clear and consistent application, notably in the area of contracting out of services and in transfers within public administration.

The use of the power will thus depend on the outcome of consultation. It is expected there will be a general consensus about the way in which this should be done in due course.

It is the case, so far as we know, that this is an unprecedented extension of Article 2(2) (apart from the European Economic Area Act 1993 section 2(4), which provides for levelling up to any higher standard voluntarily provided for EC persons). However it is not at all uncommon for there to be power to go beyond Directive obligations. Clause 17 of the Bill is an obvious example and there is no difference in substance. The reason for extending 2(2) is because the Government wants to create a seamless link between what the Directive may or may not require and what we are doing voluntarily.

The point is made that by latching on to 2(2) we are attracting the very wide powers under that section, including the power to amend primary legislation. However, if primary legislation is being amended for the purposes of the Directive we want the same result to apply. The draft clause makes clear that it is only the same or similar provision that can be made. In practice it is likely to be identical in that the Regulations will simply apply in the wider area covered as a result of the power.

17 June 1999

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