23 July 2004
The government agreed in principle to end the two-tier workforce across all public services this week after senior Cabinet ministers and the business lobby dropped their opposition.
The move, announced by Unison on July 21, could lead to the code of practice operating in local government being rolled out across the entire public sector. This ensures that new workers employed in outsourced contracts are given terms and conditions 'no less favourable' than those of their transferred colleagues.
A timetable for the rollout is yet to be finalised, although Unison said it would act swiftly to begin talks with the private sector. The issue will also be debated at the Labour Party's National Policy Forum on July 24–25.
According to a Labour spokeswoman, the move was agreed at a meeting chaired by Deputy Prime Minister John Prescott on July 19. This follows a number of last-minute postponements to the deal, which has soured relations between unions and the government since Tony Blair pledged to end the two-tier workforce in 2001.
Defence Secretary Geoff Hoon and Health Secretary John Reid had both opposed the rollout, fearing that any attempt to prescribe workers' terms and conditions to the private sector would scupper their reform plans.
But the CBI's announcement last week that it would no longer oppose the extension of the code appears to have quashed ministers' fears. 'We have accepted that the code will be pushed out across the public sector. We hope that this will bring about a more constructive employer-union dialogue,' said John Cridland, CBI deputy director-general.
Unison and the T&G were delighted with the deal, describing it as a historic breakthrough. Whitehall, it appears, was caught off guard with the Department of Health, Downing Street, the Cabinet Office and the Office of the Deputy Prime Minister apparently not knowing about it. A spokeswoman for the Cabinet Office said Unison's announcement was 'pre-emptive'.
The GMB was more cautious, stating that it was waiting for assurances that this was more than a reaffirmation of a commitment.