TUC: "A clear victory"

The government has announced a major extension of the code that governs the treatment of public sector workers who are contracted out to the private sector.

The 'code of practice on workforce matters', which is currently in force in local government, will be extended to the wider public sector - encompassing the civil service, NHS, and maintained schools.

It has been introduced to prevent the emergence of a "two-tier workforce" in situations where public sector employees are contracted out to a private sector service provider, aiming to ensure new recruits are treated the same as transferred staff.

Cabinet minister David Miliband said: "Fairness at work is part and parcel of the move to achieve a more flexible and adaptable workforce to deliver the best possible public services to local communities.

"I am therefore delighted with this extension of the 'two-tier code' across the public sector, following consultation with the TUC and CBI."

The code will apply where public sector organisation staff are transferred to a private or voluntary sector partner as part of a service contract.

Under the code, new joiners will be offered terms and conditions that are, overall, no less favourable than those of transferred employees.

It also makes sure that new joiners will be offered a reasonable pension, through membership of a good employer pension scheme or a stakeholder scheme with an employer contribution.

Miliband added said the announcement "will support the government's drive to increase productivity, as public sector organisations, contractors and unions seek to identify ways of increasing value for money".

"Indeed, by addressing a genuine grievance, I hope we will see a step-change in workforce innovation and flexibility as part of our shared commitment to provide better public services," he added.

'Sustained campaign'

Commenting on the announcement, TUC general secretary Brendan Barber said it was "a clear victory for a sustained union campaign".

"But most of all it is a victory for thousands of mainly low paid public service workers," he said.

"No longer will private companies be able to win work from the public sector purely by cutting the terms and conditions of staff.

"We now look forward to rapid implementation across the public sector through agreement between public employers and relevant unions, and will look to the Cabinet Office to aid implementation if necessary."

Tony Woodley, the Transport and General Workers'  Union general secretary, also warmly welcomed the move.

He said: "This is a significant breakthrough for public sector workers and for the delivery of public services.

"Public sector workers will welcome this as a restatement of the government's positive attitude towards public sector delivery of public services.

"Whilst there is still work to be done in negotiating the detail, this is the green light to starting the process of ensuring that public servants are paid the same rate for the same job, whoever their employer is."