Transfer of property, rights and liabilities to the OGA

Energy Bill [Lords] – in a Public Bill Committee at 10:00 am on 26 January 2016.

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Question proposed, That the clause stand part of the Bill.

With this it will be convenient to consider clauses 4 to 7 stand part.

Photo of Alan Whitehead Alan Whitehead Shadow Minister (Energy and Climate Change)

I feel puzzled about some of the arrangements that are set out in these clauses, particularly the transfer of staff to the OGA from DECC, which is referred to in clause 4. It states:

“The Secretary of State may make… transfer schemes under which persons who hold employment in the civil service of the State become employees of the OGA”

—in other words, they are not civil servants. Under the clause, the Secretary of State may make a scheme that

“may (in particular) include provision that is the same as, or similar to, the provision made by the Transfer of Undertakings (Protection of Employment) Regulations 2006”.

That is puzzling, given that, in the way the arrangements have been set out in the clause, transfer of staff to the OGA is surely covered by TUPE regulations, and the terms and conditions should, certainly for a period, be similar to those that staff enjoyed under their previous arrangements.

To put in legislation that the Minister may make an arrangement similar to the provisions under TUPE suggests that the Minister has an opportunity at least to stray from TUPE provisions with regard to transfer of staff. I would welcome an indication from the Minister that my reading of the clause is perhaps a little over-suspicious and that the intention is to hold to TUPE as closely to possible on transfer of staff. That is obviously very important to an entire group of staff who have previously been employed by DECC and are now essentially, moving into uncharted waters in terms of their terms and conditions and future security of employment. Indeed, that is precisely why TUPE was put in place in the first instance. I would therefore welcome a statement by the Minister that she does not intend to try to drive a broad interpretation through the clause, to water down or, indeed, avoid the provisions of TUPE for staff undertakings.

There is also a small puzzle about the status that a staff transfer under clause 6 gives the pensions of those who are transferred. That is a little singular because, although the clause sets up the OGA as separate for the purpose of staff employment, the pension arrangements mean that the employees of the OGA are to be treated, for the purpose of paragraph 1 of the Public Service (Civil Servants and Others) Pensions Regulations 2014, as persons to whom the scheme applies. So staff who have transferred out of employment by DECC and into employment by the OGA—a Government company, as we have established, and nothing to do with the civil service—will nevertheless have access to civil service pension arrangements.

Personally, I welcome that idea—certainly the security that the staff who are transferred from employment by DECC will have in their future pension arrangements. It seems to me to be a very positive step for those staff; but of course the OGA will employ staff in the future who have never worked for DECC and will be entirely subject to whatever terms and conditions apply when they take up employment with the OGA. Nevertheless, under the clause, those people who come into the service of the OGA will also have access to civil service pension arrangements, whatever their pension arrangements prior to their coming to the OGA. Under those circumstances, I imagine that a number of staff would transfer in to civil service pension arrangements as they come to work for the OGA, having never previously worked for DECC.

That is not about individuals who had pension arrangements with DECC and retain them, but about people who gain new pension arrangements as they come to work for the OGA. It puzzles me a little, as I said, about the final status of those staff in relation to the civil service as a whole. They are not civil servants, but they are civil servants for the purposes of pensions. They may have never been civil servants, but they sort of become civil servants in retirement. Is that a constructional problem that the Minister considers may lurk behind this arrangement, good though I think it is for current staff? Does she think it needs any further examination to resolve it, so that there can be a clear line of employment, pension rights and pension arrangements subsequently?

Photo of Andrea Leadsom Andrea Leadsom The Minister of State, Department of Energy and Climate Change 10:15, 26 January 2016

I welcome the hon. Gentleman’s questions and I can assure him that it is our intention to leave staff pretty much unchanged. The legal advice on the application of TUPE was uncertain as to whether this qualifies as a relevant transfer, so, to ensure that TUPE-like protection is afforded to staff, a transfer scheme is required. As a result of the transfer of functions, civil servants currently employed by the OGA as an Executive agency of DECC, who perform relevant functions, will be required, unless they object, to transfer along with those functions to the new Government company. The purpose of the transfer scheme is to provide the same or similar protection to that afforded by the TUPE regulations. I hope that that reassures the hon. Gentleman.

I can also tell the hon. Gentleman that, in line with the handling of all machinery of Government-like changes and TUPE transfers, staff are not able to opt out of the transfer. However, for any individuals who might wish to return to a civil service Department, a provision is normally made for a period of 12 months after the transfer date to allow them to apply for another civil service position.

On the hon. Gentleman’s second, important point about pensions, clause 6 allows civil servants who transfer to the OGA continued access to either the principal civil service pension scheme or the new Alpha pension scheme, which was introduced in April 2015, and, in some cases, both schemes, depending on the date they joined the civil service and their anticipated date of retirement. It also ensures that non-civil servants who are recruited by the OGA in future will have access to the Alpha scheme.

The hon. Gentleman asked why we are allowing new joiners to have access to the civil service pension scheme. I am glad that he welcomes it, but he nevertheless asked whether that complicates things. I can tell him that the Department has used such an approach before. For example, the Energy Act 2013 added the Office for Nuclear Regulation to schedule 1 of the Superannuation Act 1972. The benefit of allowing new joiners to have access is that it will avoid having a two-tier workforce whereby new joiners work alongside existing employees, but with different pension benefits, and of course it encourages the recruitment of staff to the OGA.

Photo of Alan Whitehead Alan Whitehead Shadow Minister (Energy and Climate Change)

I thank the Minister for that clarification. Although I appreciate that these matters are complex as far as TUPE is concerned, I welcome what I think I heard was the intention to stick as closely as possible to TUPE—

Photo of Alan Whitehead Alan Whitehead Shadow Minister (Energy and Climate Change)

—in circumstances where there might be some grey areas as far as TUPE is concerned. I trust that the close operation of TUPE will be a considerable comfort to the people who transfer out of DECC, and a comfort in terms of continuity of service as far as future employees and pensions are concerned.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Clauses 4 to 7 ordered to stand part of the Bill.

Before we come to clause 8, let me say that it is unseasonably warm in here, and if any Member wishes to remove their jacket, please feel free to do so.

Clause 8