By Lucy Phillips
14 December 2010
The government’s decision to scrap the ‘two-tier’ employment code has prompted an angry backlash.
Cabinet Office minister Francis Maude yesterday announced the immediate abolition of the code, which ensures outsourced public sector workers and new employees work under the same pay and conditions.
It has been replaced by a non-statutory ‘principles of good employment practice’ guide.
But the Association for Public Service Excellence branded the step as ‘regressive’. Chief executive Paul O’Brien said it would be seen as ‘a nod and a wink’ for less scrupulous public service contractors ‘to return to some of the worst practices of the CCT [compulsive competitive tendering] years’.
He added: ‘By scrapping the code it reinforces a message that the terms and conditions of the workforce are viewed as expendable.’
Unions also condemned the move. Unison general secretary Dave Prentis said: ‘This is another attack on mainly low-paid women workers. The two-tier code is essential to stop companies that are in the process of bidding for public sector contracts competing on how low they can pay their staff. Even many companies that bid for these contracts are privately worried that this will result in a "race to the bottom" in pay and conditions.’
He claimed the new voluntary principles would have ‘no bite’ and also predicted a return to the ‘bad old days’ of CTT, which ‘resulted in big cuts in pay and conditions, a huge turnover in staff and ultimately worse standards in public services’.
Maude defended the decision, claiming the code had done ‘little to protect staff while deterring responsible employers from delivering public service contracts’.
He added: ‘We should not be making it more difficult for SMEs and voluntary organisations to succeed in the public service market.
‘The new Principles of Good Employment Practice set clear standards and give employers freedom to provide terms for staff which are motivating and affordable.’
The move was welcomed by the CBI. Director general designate John Cridland said: ‘The two-tier code has long been a major stumbling block for independent providers wanting to deliver public services. Its abolition will encourage new providers to enter the market, including smaller companies and social enterprises. That in turn will spur innovation and drive service improvements.’
Cridland called on the government to now introduce a ‘level-playing field’ on public and private sector pension provision.
