Local Transport Bill [HL]

moved Amendment No. 43: 43: Clause 38, page 34, leave out lines 4 to 13 and insert— ““(1) Subsection (2) applies to a situation in which— (a) on the coming into force of a quality contract, local services cease to be provided by a person (the ““former operator””) in the area to which the relevant quality contracts scheme, or (in the case of a scheme which provides for different provisions to come into operation on different dates) the relevant provision of the scheme, relates, in accordance with section 129(1)(b), and (b) at the same time, a person (the ““new operator””) begins to provide local services in that area under that quality contract. (2) Any such situation is to be treated as a relevant transfer for the purposes of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (““TUPE””) (whether or not TUPE would apply apart from this subsection). (3) For the purposes of TUPE, the organised grouping of employees that is subject to the relevant transfer consists of those employees of the former operator whose employment is principally connected with the provision of the local services referred to in subsection (1)(a). (4) The Secretary of State may make regulations supplementing the provision made by this section. (5) The provision that may be made by regulations under subsection (4) includes— (a) provision for determining, for the purposes of subsection (3), whether a person’s employment is principally connected with the provision of any particular local services (including provision for or in connection with the appointment of a person to make such determination); (b) provision for determining, in the case of any particular organised grouping of employees, the particular new operator who is to be the transferee for the purposes of TUPE (including provision for or in connection with the appointment of a person to make such determination); (c) provision requiring any person operating local services in the area to which a quality contracts scheme relates to provide the authority or authorities who made the scheme with such information as may be prescribed, at such time as may be prescribed, about such of that person’s employees as would fall within subsection (3) if the person ceased to provide those services in the circumstances described in subsection (1)(a); (d) provision requiring the authority or authorities who made a quality contracts scheme to provide all persons operating local services in the area to which the scheme relates with such information as may be prescribed, at such time as may be prescribed, so as to enable such persons to comply with any requirement imposed by virtue of paragraph (c) of this subsection.””. ( ) In section 26(1) of the TA 1985 (conditions attached to PSV operator’s licence) after paragraph (b) insert— ““(bza) the operator has failed to comply with a requirement imposed by virtue of section 134B(5)(c) of the Transport Act 2000; or””. ( ) In section 155(1) of the TA 2000 (penalties) for the ““or”” at the end of paragraph (b) substitute— ““(ba) failed to comply with a requirement imposed by virtue of section 134B(5)(c) of this Act, or””.”” The noble Lord said: My Lords, in Committee, my noble friend Lord Rosser moved an elaborate and extensive amendment to Clause 38 which gave rise to considerable debate with useful contributions from the noble Earl, Lord Attlee, and the noble Lord, Lord Snape. Amendment No. 43 will, I hope, address a number of the concerns expressed in that discussion. In my response at the time to my noble friend, I explained how a transfer from a deregulated bus network to a regulated one under quality contracts would differ from the standard form of transfer of undertaking for which the TUPE regulations were designed. The process could be complex because in most cases we would not be starting with either a service directly provided by a public authority or a service provided under contract to a public authority. I fully accepted that the clause in the Bill did not deal with all possible circumstances and agreed carefully to consider the points made by noble Lords. No doubt it will be recalled that the existing Clause 38 would provide TUPE protection only to employees who were taken on by a new employer who had won a quality contract. It would not provide for all those employed in providing the existing services to transfer to the new operator. The amended clause would create an obligation so that when an existing local service is discontinued because of a quality contract coming into force, all employees engaged in providing that service would be eligible for transfer to the new operator of that contract on TUPE terms. That change was advocated by nearly all who contributed to the Grand Committee debate. Another criticism of the existing clause was that it left unclear many details of precisely which employees would qualify for TUPE terms, particularly where there was not a straightforward correspondence between the existing service and the new service. The amended clause contains provisions to address that issue as well, by means of a power to make regulations to prescribe the process to determine who comprises the existing workforce and those who would be assignable to a new contract. It is proposed that the incumbent operator would be required to provide information to the local transport authority about their current workforce which could be used as a basis for tendering. The successful tenderer would be obliged to employ those workers, provided that they were willing to make the transfer, before looking further afield for employees. This model depends on a degree of co-operation from the existing operators. First, they will have to supply employment details, suitably anonymised. Provision is made for sanctions if they fail to do so. Secondly, the TUPE provisions will apply only if the relevant services are continued in operation until the transfer date. Noble Lords will be aware that this has difficulties, but it should be borne in mind that an existing operator who will lose its services and employees unless it bids for and wins a contract to keep them going has a strong incentive to play by the rules. An operator that is able to transfer staff on TUPE terms will avoid the redundancy procedures and payments that would otherwise be necessary. We believe that on balance it is worth the risk of some employees potentially losing out in order to create a strong incentive for continuity of service to be maintained. Ultimately, we cannot force operators, in a still deregulated market, to continue providing services that may not be commercially viable. I am aware that this amendment does not address all the points made in Committee. It would be virtually impossible to please everyone and set up a system that would deal with every contingency. I believe this is a great step forward and evidence that we have been listening hard to representations on this subject, not only from Members of this House but from elsewhere such as within industry at large. There have been a lot of discussions. I beg to move.