Business secretary says government will not make any changes to Tupe regulations based on ‘one man’s anecdotes’
Vince Cable has dismissed plans put forward by No10 adviser and Tory donor Adrian Beecroft to tear up rules that protect public sector employees when services are contracted out to the private sector.
The business secretary refused to rule out examining some parts of the “gold-plated” Tupe rulebook, which protects workers’ pay and jobs when they move to a new employer, saying there could be some issues to “clear up”.
But Cable, who is involved in a war of words with Beecroft after the Tory donor accused him of being a socialist and anti-business, told the Guardian there was no need for a wholesale review of the Tupe – transfer of undertakings – protection of employment – rules.
In barbed comments aimed at Beecroft, he said the government would not make any changes based on “one man’s anecdotes” but insisted he did not want to get into a further “spat” with him.
Cable said: “I’m not getting into a debate with this man. I’m not interested in having a spat. I just want to get on with my job. Much of what is in the [Beecroft] report is uncontroversial. For instance, the need to reform employment tribunals has wide support and is something the department is already acting on.”
Speaking for the first time about proposals to water down the laws that protect workers’ pay and conditions when they are outsourced to private companies – one element of the Beecroft plans that is actively being considered by the government – he said: “There are a few issues that need clearing up, but there is no need for a wholesale review. We will look at this area based on evidence. We are not going to change the system based on one man’s anecdotes.”
Earlier this week Cable derided many of the key plans put forward by Beecroft to reform employment protections and cut red tape for businesses.
He described proposals to cut the maximum payout for unfair dismissal to make it cheaper for firms to jettison staff as “bonkers”.
But this is the first time he has commented on the Tupe arrangements. They are particularly important to the coalition after claims from the right that public sector employment conditions are too generous and prevent private sector companies pitching for contracts.
Beecroft urged the government to remove “gold-plated” Tupe provisions that bar companies from firing workers or reducing staff wages if they take over a service contract.
Beecroft said private sector employers should be able to cut the wages and pensions of all staff who move out of the public sector after one year. His controversial report claimed restrictions on employers prevented them from easily hiring and firing staff and were holding back thousands of firms from taking on new employees.
His report, which was commissioned by former No 10 strategy director Steve Hilton, called for the government to confront vested interests that shielded underperforming staff.
One employment lawyer questioned whether the Beecroft proposals on Tupe would even be achievable.
Anne Pritam, a partner in the employment team at law firm Stephenson Harwood LLP, said such a move would be difficult because the Tupe clauses on outsourcing services are enshrined in European law as well as UK law.
“The domestic legislation that we introduced simply reflects European case law, which binds us legally anyway. We cannot remove it. So they are not going to be able to change wholesale the way in which this procedure works, although there could be some small changes, useful clarifications and guidance.”
Beecroft made an estimated £100m from private equity deals before taking semi-retirement from Apax Partners, the firm he helped found.
He handed his report to Hilton last autumn but it was shelved. It was published this week in response to freedom of information requests and immediately caused a stir with its controversial call for a bonfire of traditional employee rights.