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two-tier code abolished

29 March 2011

The Secretary of State for Communities and Local Government, Eric Pickles has announced that the Code of Practice on Workforce Matters in Local Authority Service Contracts (the so-called “two-tier code”) is repealed with immediate effect.

The code sought to ensure that new-joiners were given comparable terms and conditions (including pensions) to those former local authority staff who had transferred to the service provider under TUPE.

The government claim that abolishing the code will “ help create a level playing field, ensure more opportunities for innovation, help ensure better value for taxpayers’ money in the provision of public services, and remove red tape that hinders job creation.”

However, service providers seeking to give new-joiners less favourable terms and conditions will have to exercise caution to avoid claims for discrimination or inequality of contract terms under the Equality Act 2010.

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