My Lords, the noble Lord, Lord Whitty, made some important points about protections for workers in the bus services industry. As he acknowledged, we have included the TUPE provisions in the Bill to protect those staff affected by the initial introduction of a franchising scheme or an enhanced partnership scheme in an area, recognising that the transition from the current market to a contract or a number of contracts could be difficult and uncertain for existing staff.
However, as I have said a number of times, the Bill is devolutionary. It gives considerable flexibility regarding the nature of the contracts to be awarded by those authorities taking forward franchising and, potentially, enhanced partnership schemes. As I have said in discussions with the noble Lord outside the Chamber, I agree entirely that people should be paid at a rate that reflects the hard work they are doing. I also note the noble Lord’s comments about the danger of a race to the bottom on terms and conditions and the perception of a two-tier workforce. Any authority contracting for services will need to consider a number of factors when assessing bids for contracts, and the Bill will require it to consult and engage with employee representatives at an early stage.
However, it would not be consistent with the rest of the Bill to mandate the basis on which contracts are procured by local transport authorities or the contents of those contracts, as Amendments 22 and 47 propose. Employees and their representative groups will have plenty of opportunity to raise such points during the consultation process for the respective schemes.
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There are also practical issues with the amendments; for example, they would require all new employees to be offered terms and conditions no less favourable than those provided to employees who are covered by TUPE. But employees who transfer under TUPE could well be on a range of different terms and conditions reflecting their different roles and length of time in employment. This could also, in practical terms, lead to feelings of unfairness and resentment among transferred employees as it would put their terms and conditions on a par with those employees who were only newly recruited. It would also place a financial burden on operators—and so local transport authorities—by requiring them to employ people at something other than the going legal rate. Any such requirement could perhaps be sufficient to prevent some authorities from pursuing franchising schemes.
Turning to the amendments regarding potential dismissals, again, I have some sympathy with the intention behind the subsections concerning redundancies that may be made before or after the introduction of a local service contract. These amendments are designed to deal with a situation where an operator may use
franchising as a cover to shed employees before contracts are transferred. Employment law already deals with unfair dismissal of employees and therefore we do not feel that it would be appropriate for the Bill to be a vehicle to address such issues. In any event, the scenario that these amendments address is a highly unlikely one. I find it hard to imagine that an employer will chose to bear the redundancy costs associated with dismissing an employee if it is able to transfer them to a new operator under TUPE instead. It is also my understanding that a provision of this nature was not included in the existing quality contract scheme legislation—which franchising will replace—debates on which the noble Lord took part.
On a similar basis, I cannot support Amendments 41, 42, 81 and 82. These amendments seek to broaden the situations that are to be treated as a “relevant transfer” for the purposes of TUPE. The amendments would broaden the Bill’s provisions so that TUPE protections would apply where a new operator begins providing local services some time after the previous service has ceased. As I have already mentioned, the TUPE provisions are designed to ensure that there is a smooth transition from one operator to another when franchising or partnerships are first introduced. The Bill therefore protects those employees who are providing services at the point of transfer. As I have said, any decisions taken in advance of the introduction of franchising or, potentially, enhanced partnership contracts are for the operator concerned, and it will need to ensure that it acts fairly and reasonably.
That said, I note the noble Lord’s suggestion and I will reflect on that to see how we might best restate the importance of TUPE protections and provisions, as he said, within the guidance that accompanies the Bill. I hope, on the basis of the explanation that I have provided and the reassurance that we will see what more we can do with guidance in respect of TUPE provisions, that the noble Lord feels minded to withdraw his amendment.