30 May 2003
The government is heading for another public row with the unions this summer unless the tortuous negotiations over disputes in outsourced contracts are resolved swiftly, it emerged this week.
Unions, council employers and the private sector were forced back into talks last month to agree a model for alternative dispute resolution following the imposition of a deal to end the two-tier workforce in February.
But sources close to the talks said they were 'dancing on the head of a pin and dealing with insignificant dross' rather than tackling the issues head-on.
Under the new employment code, private contractors providing local authority services must provide new staff with terms and conditions 'no less favourable' than those of their colleagues.
After personally intervening to force a deal, Prime Minister Tony Blair gave both sides just six weeks to come to an agreement on an alternative dispute resolution – which has to be expedient and low-cost – or one would be imposed. This will govern any disputes over employment conditions for new staff.
The group has failed to reach agreement on whether the resolution, which could be conducted by an independent arbitrator, would be binding. According to sources, the Confederation of British Industry wanted a veto clause.
There is also disagreement on when the resolution model could be invoked, with some in the private sector camp arguing that it could be initiated only once new starters had been employed.
Unions are arguing for resolution before employment begins to ensure that employers, workers and the private sector are clear on costs and employment conditions.
According to insiders, the unions, which have launched a campaign to expand the two-tier deal across the public sector, have already approached Number 10 and warned that without a swift resolution they face another showdown this summer. 'This deal has been dragging on since 2001 and the CBI is just dragging its heels again,' a source told Public Finance.
'The government has to be clear that going to union conferences this year with debates about the future affiliation with the party looming and this issue unresolved may just force some traditional supporters into a corner,' said another.
Other public service unions are watching the negotiations with interest as they begin to push for a similar deal in their own areas. An alternative dispute resolution effectively gives the two-tier deal teeth and could save thousands of pounds in expensive and lengthy litigation over employment conditions.
PFmay2003
