Procurement Code of Practice Workforce Matters and Equalities Draft IV February 2004 Contents 1. INTRODUCTION 2. CONTRACT PROCEDURES 3. WORKFORCE MATTERS 4. EQUALITIES APPENDIX 1 - Standard Pre-Qualification Questionnaire Questions APPENDIX 2 - Example Clauses APPENDIX 3 - Code of practice on workforce matters in local authority service contracts APPENDIX 4 - Provision of Information by Luton Borough Council to Bidders APPENDIX 5 - Provision of Information from Bidders on their Intentions for the Workforce APPENDIX 6 - Bidders’ Past Performance on Workforce Matters APPENDIX 7 - Post Transfer Reporting on Workforce Matters APPENDIX 8 - Useful Information APPENDIX 9 - Contract Officer Checklist 2 1. INTRODUCTION 1.1 Best value requires the Council to review services and choose the option that delivers services at best value with continuous improvement. In some cases this may lead to services being provided by external providers. Whether or not this is the case the Council is committed to providing the highest quality of service. 1.2 The Council recognises that skilled and well-motivated workforces deliver high quality services and that the active support and participation of the workforce is vital to achieving success in Best Value. The Council will consult and involve the recognised trade unions throughout the Best Value Service Review process in line with its statutory obligations 1.3 Where an external provider is chosen to deliver a service, the Council will make the decision on the basis of Best Value and an appropriate level of service and not in order to drive down the terms and conditions of employees. The Council will ensure that the quality of the workforce transferred to a provider is enhanced and not undermined during the lifetime of the contract as required by the ODPM Circular 03/2003 Best Value and Service Improvement. 1.4 Where possible the Council will streamline the handling of Equalities Issues into all procurement procedures. Internal Procurement Training programmes cover Equalities Issues and all staff with contract management responsibilities are encouraged to attend. It is the responsibility of departments to ensure that staff receive this training. Specific training requirements can be discussed with Departmental Equalities and Training Officers and/or the Corporate Equalities and Procurement units. 1.5 This Code of Practice (COP) is produced to assist compliance with UK domestic legislation, EU legislation and the Government Code of practice on workforce matters in local authority service contracts (set out in Appendix 3 and hereafter called "the Government Code") and is laid out into three parts. The first part sets out where and how workforce matters and equalities issues can be included in the contract procedure. The second and third parts outline the main areas of workforce matters and the main equalities issues to be considered when procuring works, supplies and services for the Council. 1.6 This COP aims to provide a clear set of guidelines for understanding workforce matters and equalities issues when producing user requirements and evaluation criteria for the purchase of works or supplies and services. In particular it covers the application of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE). The Council will ensure that all parties are aware of their statutory obligations to consult recognised trade unions. This COP has been developed to support the Equalities Action Plan. For further information on the Action Plan contact the Equalities Unit 1.7 All parties involved are advised to seek advice from their departmental H R team on the application of TUPE and the legal obligations this places upon them. Officers responsible for a procurement exercise, which may involve TUPE, should also discuss the pension implications of outsourcing staff with the Exchequer Services Manager. This should be done when first considering drawing up a tender specification 2. CONTRACT PROCEDURES 2.1 Pre-qualification Pre-qualification allows potential bidders to be assessed on their suitability and general competence. Those that are unsuitable can be rejected and a selection can be made from the best of those that do meet the minimum standard. Any bidder who has broken the law or has been found guilty of misconduct may be excluded from the tender process. Therefore bidders should be assessed on workforce matters and equalities issues at this pre-qualification stage. Areas, which can be assessed in relation to equalities, include: The last three years experience/track record in providing similar services including any liquidated damages awarded against the organisation Average annual staffing and turnover (previous three years) Staff details including qualifications and training for those involved in service provision TUPE track record where relevant or their understanding of the process they will follow. Quality issues including accreditation, procedures (including HR procedures) and documentation where relevant to service delivery Details of convictions for criminal offences or of any acts of misconduct. Details of any remedial action should also be included Details of any breach of employment protection legislation, health and safety legislation and equalities legislation over the last three years with any remedial action undertaken and details of any awards and settlements Details of any non-compliance with the Government Code and any remedial action taken Standard Pre-qualification questions can be found in APPENDIX 1 2.2 Specification To attract bidders with suitable staff management practices the appropriate level of quality should be written into the specification. For the bidder to achieve satisfactory performance of the contract they will have to recruit and maintain a skilled and wellmotivated workforce. To enable bidders to innovate, requirements should as far as possible be specified in terms of outputs and performance. 4 If national standards, schemes or brand names are to be used the term "or equivalent" should be used so that EU rules are not broken. Care should also be given to not specifying requirements that are unnecessary or commercially unrealistic as this may deter some prospective bidders who may be unable to meet them (e.g. small firms, voluntary organisations etc) 2.3 Contract terms and conditions Where a service is to be outsourced or there is a subsequent transfer of an outsourced service there should be a condition in the contract ensuring that the contractor abides by the Government Code. The contract shall also include a provision for resolving disputes about the application of the Government Code through 'alternative dispute resolution' (ADR) as an alternative to litigation. The employers, CBI and TUC have agreed an approved ADR involving ACAS and this should be the preferred option, the Corporate Procurement Unit can provide information on appropriate ADR mechanisms. 2.4 Invitation to tender Details of the information that bidders need to include in their tender should be set out in the invitation letter or an annex to it (Appendix 5). This information should as appropriate include: A transition plan for taking on staff under TUPE Training and development plans Specific service and quality issues If the Council is the existing service provider and employer a review of the existing skills of the workforce should be carried out. If the skills of the workforce are not appropriate to the contract, requirements for additional skills should be included in the invitation to tender. 2.5 Tender evaluation The approach taken on workforce matters and equalities will depend on the service to be provided. Where workforce matters and equalities issues are part of the evaluation process they can only be used as a means of clarifying clearly expressed requirements set out in the service specification that relate directly to the nature of the service in question. Only the bidding company and not the parent company should be evaluated. All bidders should be offered a debriefing after the evaluation has taken place. Areas where they were unsuccessful and what they need to do to be successful next time should be highlighted. This will improve the market for successive contracts. 5 2.6 Contract Management/Monitoring Monitoring of workforce matters should be limited to those that are relevant to the performance of the contract. The main areas to monitor in relation to workforce matters and equalities issues are service delivery, workforce composition, sickness absence, health and safety reporting, discipline and grievance and tribunal applications. The monitoring should be mainstreamed into normal reporting mechanisms to avoid extra and unnecessary work. The monitoring should also be appropriate to the nature of the contract (i.e. length, size and type). The monitoring should be consistent whether the service is provided internally or externally. Feed back to the service provider on the outcome of monitoring must be prompt and specific. Performance information about a contractor must be regarded as confidential and never passed to other candidates. An invitation should be extended to Trade Unions to be involved in the reporting mechanism. 2.7 Enforcement The council will enforce the obligations on the contractor relating to the Government Code that are created by the Council's contract. In the first instance employees, recognised trade unions, and employee representatives should seek to resolve any complaints they have about how the obligations under the Government Code are being met directly with the contractor. Where it appears to the council that the contractor is not meeting its obligations under the Government Code or where an employee or a recognised trade union writes to the council to say that it is unable to resolve a complaint directly with the contractor, the council will first seek an explanation from the contractor via the contract manager or on site representative. If the response is deemed to be satisfactory the Council will respond to the complainant informing them of this. If however the response is unsatisfactory the Council will ask the contractor to take immediate remedial action. If the contractor does not comply with this request the council will enforce the terms of the contract. See para 2.3 re Alternative Dispute Resolution mechanisms in the contract conditions Where a contractor has not complied with the Government Code or the contract the Council is not bound to consider them for future work. 6 3. WORKFORCE MATTERS 3.1 Health and Safety It is important that service delivery on behalf of the Council by contractors is carried out without undue risk to service users and the contractor's employees and any other person affected by their activities. The Corporate Health and Safety Team must be involved in evaluating tenderers Health and Safety Policies against the corporate standards. The Health and Safety at Work Act 1974 places a statutory duty on the Council with regard to the health and safety of its employees and others affected by its undertaking. The duty cannot be delegated even where the undertaking is contracted out. Key principles are: 3.2 Ensure contractors have appropriate levels of Health and Safety policies and procedures and that they meet current health and safety legislation, including the Construction Design and Management Regulations where appropriate. Ensure that only contractors (and nominated sub-contractors) who have satisfactorily met the Council's Health and Safety criteria are used. Ensure that suitable and sufficient Project Risk Assessments and method statements are completed. Ensure that all contracts include an appropriate clause on health and safety. Ensure that the contractor’s performance is monitored whilst work is in progress. Ensure that accidents or incidents occurring are reported in line with the Council’s Health and Safety Policy, in compliance with the Reporting of Injuries, Diseases, and Dangerous Occurrences Regulations 1995. The main contractor must be responsible for ensuring the sub-contractor is aware of these provisions. Trade Union Recognition The Council recognises the trade unions as representatives of its employees and all contractors (and sub contractors as appropriate) working for the Council are expected to recognise the trade unions for collective bargaining, consultation and representation, and facilitate trade union access to their staff (both transferred and new joiners). 3.3 TUPE - Transfer of Undertakings (Protection of Employment) Regulations 1981 The Council takes a positive attitude to TUPE. Ultimately it's for the courts to determine whether TUPE applies, but in the interests of mutual commercial certainty and the more cost-effective management of inherent risks and in the light of government policy we are taking this stance. The Council will conduct all its 7 contracting and public/private partnerships on the basis that TUPE will apply unless there are genuinely exceptional reasons for it not to (as set out in the Cabinet Office's "Statement of Practice on Staff Transfers in the Public Sector") i.e.: Where a contract is for the provision of both goods and services, but the provision of services is ancillary in purpose to the provision of goods; or Where the activity for which the Council is contracting is a new or a one off project: or Where services or goods are essentially a commodity bought "off the shelf" and no grouping of staff are specifically and permanently assigned a common task: or Where the features of the service or function subject to the contracting exercise are significantly different from the features of the function previously performed by the Council, or by an existing contractor. Under Section 101 of the Local Government Act 2002 that the appropriate person who is the Secretary of State may give appropriate directions in relation to TUPE transfers. It is envisaged that these appropriate directions will follow the Statement of Practice on Staff Transfers referred to above NB. Where staff do not transfer and TUPE does not apply the Council should, in the case of first generation contracts, identify as soon as possible with the contractor any staff that will be taken on by the contractor voluntarily and by mutual consent. Where possible the staff remaining should be redeployed. The costs of redeployments and redundancies must be taken into account when evaluating the bid. All bids made on a non-TUPE basis when there are no exceptional reasons will not be considered. All invitations to tender will specify what staff are to transfer with accurate and timely information on the numbers, composition and terms and conditions of employees to be transferred (APPENDIX 4). If staff are to transfer, at the earliest stage staff and recognised unions will be informed in writing of the intention that staff will transfer (and where possible when it will take place) and that TUPE applies. In all cases it is of the utmost importance that bidders can demonstrate their ability to understand and manage their responsibilities under TUPE (APPENDIX 5) Where TUPE does not apply in strict legal terms, the principles of TUPE should be followed and the staff involved should so far as legally and practically possible be treated no less favourably than had the regulations applied. Further guidance on TUPE can be found at: The Office of the Deputy Prime Minister - www.local-regions.odpm.gov.uk Or - http://www.cabinet-office.gov.uk/civilservice/2000/tupe/stafftransfers.pdf 8 3.3.1 Pensions and TUPE There are two main issues relating to the protection of pensions in staff transfer: 1. To ensure continuity of pension accrual where the transferred staff leave the Local Government Pension Scheme (LGPS) they should be offered membership to an alternative scheme by the new employer which is actuarially certified as being 'broadly comparable' with the LGPS. An alternative for employees who are members of the LGPS is for the new employer, if they wish, to seek 'non-associated employer' status within the LGPS, so that staff continue to have access to that pension scheme for future service. 2. There should be a 'bulk transfer' agreement with the new employer's pension scheme providing that staff will be able to transfer their accrued service credits into that scheme on a day-for-day, or equivalent, basis. Further guidance on this can be found in APPENDIX 3, 4 and 6 and from the Exchequer Services Manager Or at www.gad.gov.uk - government's actuary department 3.3.2 Terms and Conditions and TUPE In broad terms TUPE legislation protects employees' jobs, terms and conditions (except occupational pension arrangements) when the business in which they work is transferred from one employer to another. Employment with the new employer is treated as continuous from the date of the employee's start with the first employer. 3.3.3 New joiners Where a contractor recruits new staff to work on a contract alongside staff transferred from the Council, it will offer employment on terms and conditions, which are overall no less favourable than those of the transferred employees. No less favourable shall be taken to mean the same terms and conditions, or any such variations that have been negotiated and agreed. The contractor will also offer new recruits one of the following pension provision arrangements: Membership of the local government pension scheme, where the employer has admitted body status within the scheme and makes the requisite contributions. membership of a good quality employer pension scheme, either being a contracted out, final-salary based defined benefit scheme, or a defined contribution scheme. For defined contribution schemes the employer must match employee contributions up to 6%, although either could pay more if they wished. 9 a stakeholder pension scheme, under which the employer will match employee contributions up to 6%, although either could pay more if they wished. 3.3.4 Second and Subsequent Transfers When the Council re-tenders a contract then, except in exceptional circumstances or where the current contractor is successful, staff working on the contract will transfer and TUPE will apply. In these cases the incumbent contractor/supplier should be required (under existing contract) to provide full TUPE information. 3.3.5 Sub-contractors Where the primary contractor to provide services to the Council transfers staff originally in the employ of the Council to a sub-contractor, the primary contractor will be responsible for observance of the Government Code by the sub-contractor. 3.4 HR Practices The Council recognises that a well-motivated and skilled workforce delivers quality services. Therefore it is important that contractors have appropriate HR practices in place to ensure this. Such as: Training and development programmes Dispute procedures e.g. Disciplinary and grievance procedures Sickness policies and procedures Harassment /Bullying policy Equality policy Code of Conduct Health and Safety Contractors should be encouraged to participate in joint training programmes where the Council has developed them. One way of assuring appropriate systems is to look for a recognised standard such as Investors in People (IiP) or equivalent. 4. EQUALITIES Contractors used by the Council are required to comply with the Council’s Equalities Policy as well as current legislation in providing contracted services and in the employment of staff. The Council Policy refers to Black and minority ethnic people, women, disabled people, older and younger people, gay, lesbian, bisexual and transgender people, religion and belief and will incorporate people with HIV/Aids and long-term illness. 10 The Council's performance on the Equalities Policy will be monitored against the Generic Equality Standard. The Council should therefore support contractors in developing their own Equal Opportunities Employment Policies and practices with performance standards written into contracts. One way in which this can be achieved is to include standard clauses in contract specifications or in the form of the contract (Examples can be found in APPENDIX 2). Questions you should ask in relation to this are: 4.1 Are equalities fundamental to the delivery of the service/product? Has the supplier ever been found to have breached equal opportunities legislation? Does the supplier have an equalities policy? If not is there anything that can be done to encourage them to implement one? What training is available to ensure that all employees understand their rights and responsibilities in relation to the equalities policy? What arrangements are in place for workforce monitoring? Have there been any complaints about the supplier? If so how many and how serious? And is it appropriate for the Council to work with or to continue working with the contractor/supplier? In what media should adverts for Council work be placed to ensure they reach the widest/target audience? Does the contractor/supplier advertise in these media? Race Equality The Race Relations Act 1976, as amended by the Race Relations (Amendment) Act 2000 (RRAA), makes it unlawful to discriminate against anyone on grounds of race, colour, nationality (including citizenship), or ethnic or national origin. The procurement activities of the council will be assessed for their transparency, how they support the mainstreaming of race equality, their legality and how they define roles and responsibilities. When race equality is a core requirement in a contract it will influence decision making at each stage of the procurement process. It is likely that equalities will be a core requirement in service contracts that interface with the citizens we serve e.g. meals on wheels, social care, transport etc Questions you may wish to ask are What is to be provided under the contract Is the provision of the goods, services or works likely to affect our ability to meet our duty to promote race equality Is the provision of the goods, services or works one of the areas we have assessed as being relevant to meeting the duty? Is it therefore necessary to include requirements for promoting equality in the contract? 11 If the answer is yes what race equality requirements will need to be included? While race equality will probably be relevant in most contracts for services you need to assess its relevance in respect of goods and works contracts The Council has a general statutory duty to ensure that their functions are carried out with due regard to the need to eliminate unlawful discrimination and to promote equality of opportunity, and good relations, between persons of different racial groups. In particular, the Council should consider: Services provided under contract or agreement; Contractor’s Equal Opportunities Policies and practices; Contract opportunities for businesses owned or run by people from ethnic minorities [Race Relations [Amendment] Act 2000[RRAA], The Duty to Promote Race Equality, A guide for Public Authorities, section 5, p67] Therefore, contracts for services should specify How the service will be provided without racial discrimination The monitoring information the Council will require to ensure compliance with the RRAA. (See Appendix 2) It should be made clear to the contractor that such clauses are added to ensure the Council is complying with the RRAA and/or other relevant legislation. The procurement function of the Council will be assessed for adverse impact on organisations, or firms run by people from Black and Minority Ethnic [BME] communities. A BME business is defined as a business where at least 51% of the proprietors were from black or minority ethnic groups. Questions you may wish to ask are: Is there a race equality scheme in place? Can culturally specific services be provided? Do harassment polices specifically cover racial harassment? Is there staff training to ensure that staff are aware of their rights and responsibilities in relation to the race equality policy? What arrangements are in place for monitoring the ethnic composition of the workforce? What arrangements are in place to ensure that consultation on service design and delivery is non-discriminatory? How will adverse findings from monitoring returns be dealt with? 12 Further information can be found at: www.cre.gov.uk - Commission for Racial Equality website. Offers information and advice on race equality. www.ethnicbusiness.org - Ethnic Minority Business Forum website www.change-construction.org - Change the face of construction is an independent project dedicated to encouraging greater diversity across all sectors of the construction industry. 4.2 Sex Equality 4.2.1 The Sex Discrimination Act 1975 as amended The Sex Discrimination Act (SDA) 1975 as amended prohibits discrimination against men, as well as against women. It also requires that married people should not be treated less favourably than single people of the same sex. The primary responsibility at law rests with each employer to ensure that there is no unlawful discrimination. It is important, however, that measures to eliminate discrimination or promote equality of opportunity should be understood and supported by all employees. The SDA prohibits sex discrimination in the provision of goods, facilities and services to the public. The Act applies to all organisations that provide goods, facilities and services to the public or a section of the public, whether for payment or free of charge. Questions you may wish to ask are: Has the EOC code of practice on eliminating sex discrimination been adopted? What arrangements are in place for monitoring the composition of gender in the workforce? How is gender equality mainstreamed into policy decisions? What arrangements are in place to ensure that the service is fully accessible to both women and men? What arrangements are in place to ensure that consultation on service design and delivery is non-discriminatory? How is equality between men and women promoted in the workforce? Has the service provider established a procedure for dealing with complaints of sexual harassment, which covers both the employee and the customer? 4.2.2 Equal Pay Act (EPA) 1970 as amended Equal pay law is meant to help ensure women and men in the same employment are treated equally in pay and other contractual terms and conditions of employment. "Pay" has a wide definition and includes basic salary and other pay benefits, such as 13 occupational pensions, holiday pay, sick pay and shift pay. Equal pay law in Britain is set out in the Equal Pay Act (EPA) 1970 as amended. European Union law also covers equal pay. Article 141 of the Treaty of Amsterdam requires that women and men should receive equal pay for equal work. Under the EPA employees may claim equal pay with colleagues of the opposite sex where they are in the same employment and are doing: Work which is the same or broadly similar (known as "like work") Work rated as equivalent under an analytical job evaluation scheme Work which is different but which is of equal value in terms of the demands of the jobs As well as meeting the legal requirements, there are sound business reasons for implementing equal pay. Transparent pay systems, which value the entire workforce, send positive messages about an organisation's values and way of working. This aids the motivation of its workforce. The Equal Opportunities Commission (EOC) Code of Practice on Equal Pay recommends that employers should: adopt and implement an equal pay policy carry out a review of the pay system Questions you may wish to ask are: Has a thorough analysis of pay systems been carried out? What pay systems are in place? Are they non-discriminatory and transparent? Are they based on a job evaluation process that is non-discriminatory? Has the EOC code of practice on equal pay been adopted? Further information can be found at www.eoc.org.uk - The Equal Opportunities Commission website 4.3 Disability The Disability Discrimination Act 1995 (DDA) provides protection against unfair discrimination in areas such as employment, and access to goods and services The law says there are two ways that employers can unlawfully discriminate against a disabled employee or job applicant (This also applies to service users). These are: by treating them less favourably – without justification - because of their disability or by not making reasonable adjustments because of their disability, once again without justification 14 Therefore contractors/suppliers should be asked to provide evidence of how disabled people will be catered for within a contract both as service users and employees. The Disability Rights Commission (DRC) published a revised Code of Practice on rights of access to goods, facilities, services and premises for disabled people. This statutory Code, agreed by Parliament, provides detailed advice on the way the law should work, together with practical examples and tips. Its status means it must be referred to for guidance in court when deciding on DDA Part III cases. This can be found at www.drc.org. Questions you may wish to ask are: Has the code of practice on Disability been adopted? Is monitoring of equality for disabled staff monitored? and if so, how? Are disabled people consulted about service provision? And if so, how? Are physical environments adjusted to facilitate access by disabled people? Further guidance on disability issues can be found at: www.disability.gov.uk - Government website offering information and advice on disability issues. www.radar.org.uk - Royal Association for Disability and Rehabilitation. Gives advice to employers and employees on all aspects of disability 4.4 Sexual Orientation The Department for Trade and Industry has published its long-awaited proposals – Towards Equality and Diversity – for implementing the EU Directive on Equal Treatment in Employment and Occupation. The new legislation will prohibit discrimination in the work place on a number of new grounds including sexual orientation. Questions you may wish to ask are: Does the contractor/supplier's equalities policy extend to people of differing sexual orientation? Do harassment policies specifically include and protect lesbians and gay men from homophobic harassment? Are people of different sexual orientations consulted about service provision? and if so, how? Further information on this issue can be obtained from www.stonewall.org.uk - A campaigning organisation for lesbian and gay equality. 15 4.5 Age Discrimination Age discrimination although not currently illegal can lead to the loss of skills and experience from contractor/supplier workforces. Questions you may wish to ask are: Are there any age barriers to employment in place? Are older and younger people consulted about service provision? and if so, how? Are older and younger people given the same access to training and development opportunities? What arrangements are in place for monitoring the composition of age in the workforce? Further guidance can be found at: www.helptheaged.org.uk - Help the Aged website www.ace.org.uk - Age concern website www.caade.net - Campaign Against Age Discrimination in Employment website www.efa.org.uk - Employers' Forum on Age website 4.6 Religion or Belief Discrimination on the grounds of religion or belief is illegal and it may be evidence of racial discrimination. Questions you may wish to ask are: 4.7 Are people of differing religions and beliefs consulted about service provision? and if so, how? Does the contractor/supplier's equalities policy extend to people of differing religions and beliefs? What arrangements are in place to ensure that service delivery is compatible with religions and beliefs? (e.g. types of food available in catering contracts) Work/Life Balance Employees are more productive if they are able to balance their work and personal lives effectively, thereby facilitating enhanced delivery the organisational objectives of the contractor/supplier. This will in turn improve the delivery of the service, which is why the Council seeks 'best practice' in employment. In addition under the Employment Act 2002 and Regulations under that Act a number of family friendly rights for men and women have been introduced. Questions you may wish to ask are: 16 What steps are in place to comply with the Employment Act 2002? What maternity/paternity arrangements are in place? and do they improve on the statutory rights? Are hours of work generally structured to allow for a reasonable balance between work and other aspects of life? Are staff able to work from home? Is any support given for childcare costs? Are arrangements in place for staff to job share? Is a flexitime scheme in operation? Is adoption leave available? www.parentsatwork.org.uk - Parents at Work website offers sources of information for working parents on employment rights. www.employersforwork-lifebalance.org.uk - Employers for Work-life balance website. It shares best practice and demonstrates to employers how work-life policies can be introduced on a practical basis. www.new-ways.co.uk - New Ways to Work website offers information and advice on flexible working arrangements. 17 APPENDIX 1 Standard Pre-Qualification Questionnaire Questions Approved Questions on Race Relations that can be asked of contractors (some of which are specified under Dept Environment Circular 8/88) 1. Is it your policy as an employer to comply with your statutory obligations under the Race Relations Act 1976, as amended by the Race Relations (Amendment) Act 2000? 2. In the last 3 years has any finding of unlawful racial discrimination been made against your organisation by a court or employment tribunal? 3. In the last 3 years has your organisation been the subject of formal investigation by the Commission for Racial Equality on grounds of alleged unlawful discrimination? 4. What steps did you take in consequence of any finding? 5. Is your policy on race relations set out: 6. in instructions to those concerned with recruitment, training and promotion? In documents available to employees, recognised trade unions etc In recruitment advertisements etc Do you observe as far as possible the CRE's Code of Practice for Employment 1983? 18 APPENDIX 2 Example Clauses 1. In specification x. Equal Opportunities Policy x.1 The Service Provider shall comply with all non discrimination and equality of opportunity legislation, codes of practice and the Council's equalities policy. The Service Provider will actively promote equality of opportunity as it relates to: People with disabilities. People living with or affected by HIV or AIDS. People from ethnic or religious groups. Sexuality and gender discrimination. Age discrimination. Dealing with harassment and bullying. The Service Provider must ensure that staff are sufficiently qualified, competent, experienced, instructed and/or supervised in relation to Equality of Opportunity. 2. In form of contract x. Equalities x.1 The Contractor shall comply with its statutory obligations under the Race Relations Act 1976, as amended by the Race Relations (Amendment) Act 2000, and all relevant codes of practice issued by the Commission for Racial Equality, and operate an equal opportunities policy which complies with the practical guidance and recommendations contained in such codes of practice. The Contractor shall provide such information as the Council may reasonably request for the purpose of assessing the Contractor’s compliance with this Condition In performing the service the Contractor shall not discriminate against any service user on the grounds of race, colour, ethnic and national origins, gender, disability, marital status, sexuality, age or ethical beliefs and in particular shall not unlawfully discriminate against any person within the meaning of the Sex Discrimination Act 1975, the Disability Discrimination Act 1995, the Race Relations Act 1976, as amended by the Race Relations (Amendment) Act 2000. 19 x.2 In the event of any finding of unlawful racial discrimination being made against the Contractor by any Court or employment tribunal, or of an adverse finding in any formal investigation by the Commission for Racial Equality the Contractor shall take appropriate steps to prevent repetition of the unlawful discrimination. The Contractor shall, on request, provide the Council with details of any steps taken under this Condition. 20 APPENDIX 3 Code of practice on workforce matters in local authority service contracts Workforce matters under best value 1. This document sets out an approach to workforce matters in local authority service contracts which involve a transfer of staff from the local authority to the service provider, or in which staff originally transferred out from the local authority as a result of an outsourcing are TUPE transferred to a new provider under a retender of a contract. This Code will form part of the service specification and conditions for all such contracts. 2. The Code recognises that there is no conflict between good employment practice, value for money and quality of service. On the contrary, quality and good value will not be provided by organisations that do not manage workforce issues well. The intention of the authority is therefore to select only those providers who offer staff a package of terms and conditions, which will secure high quality service delivery throughout the life of the contract. These must be sufficient to recruit and motivate high quality staff to work on the contract and designed to prevent the emergence of a ‘two-tier workforce’, dividing transferees and new joiners working beside each other on the same contracts. 3. Contractors who intend to cut costs by driving down the terms and conditions for staff, whether for transferees or for new joiners taken on to work beside them, will not provide best value and will not be selected to provide services for the council. However, nothing in this Code should discourage local authorities or contractors from addressing productivity issues by working with their workforces in a positive manner to achieve continuous improvement in the services they deliver. Treatment of transferees 4. In its contracting-out of services, the local authority will apply the principles set out in the Cabinet Office Statement of Practice on Staff Transfers in the Public Sector and the annex to it, A Fair Deal for Staff Pensions. The service provider will be required to demonstrate its support for these principles and its willingness to work with the local authority fully to implement them. 5. The intention of the Statement is that staff will transfer and that TUPE should apply, and that in circumstances where TUPE does not apply in strict legal terms, the principles of TUPE should be followed and the staff involved should be treated no less favourably than had the Regulations applied. The Government has now indicated an intention to legislate to make statutory within local government the provisions in the Cabinet Office Statement. 6. The annex to the Statement requires the terms of a business transfer specifically to protect the pensions of transferees. Staff must have ongoing access to the Local Government Pension Scheme or be offered an alternative good quality occupational pension scheme, as defined in the annex to the Cabinet Office Statement, under which they can continue to earn pension benefits through their future service. There must also be arrangements for handling the accrued benefits, which staff has already earned. 21 Treatment of new joiners to an outsourced workforce 7. Where the service provider recruits new staff to work on a local authority contract alongside staff transferred from the local authority, it will offer employment on fair and reasonable terms and conditions which are, overall, no less favourable than those of transferred employees. The service provider will also offer reasonable pension arrangements (as described at paragraph 10 below). 8. The principle underpinning the provisions of paragraph 7 is to consider employees’ terms and conditions (other than pensions arrangements which are dealt with in paragraph 10) in the round – as a ‘package’. This Code does not prevent service providers from offering new recruits a package of non-pension terms and conditions, which differs from that of transferred staff, so long as the overall impact of the changes to this package meets the conditions in paragraph 7. The aim is to provide a flexible framework under which the provider can design a package best suited to the delivery of the service, but which will exclude changes, which would undermine the integrated nature of the team or the quality of the workforce. 9. The service provider will consult representatives of a trade union where one is recognised, or other elected representatives of the employees where there is no recognised trade union, on the terms and conditions to be offered to such new recruits. The arrangements for consultation will involve a genuine dialogue. The precise nature of the arrangements for consultation is for agreement between the service provider and the recognised trade unions. The intention is that contractors and recognised trade unions should be able to agree on a particular package of terms and conditions, in keeping with the terms of this Code, to be offered to new joiners. Pension arrangements for new joiners to an outsourced workforce 10. The service provider will be required to offer new recruits taken on to work on the contract beside transferees one of the following pension provision arrangements: Membership of the local government pension scheme, where the employer has admitted body status within the scheme and makes the requisite contributions. Membership of a good quality employer pension scheme, either being a contracted out, final-salary based defined benefit scheme, or a defined contribution scheme. For defined contribution schemes the employer must match employee contributions up to 6%, although either could pay more if they wished. A stakeholder pension scheme, under which the employer will match employee contributions up to 6%, although either could pay more if they wished. On a retender of a contract to which this Code applies the new service provider will be required to offer one of these pensions options to any staff who transfer to it and who had prior to the transfer a right under the Code to one of these 22 pension options. Monitoring arrangements 11. Throughout the length of the contract, the service provider will provide the local authority with information as requested which is necessary to allow the local authority to monitor compliance with the conditions set out in this Code. This information will include the terms and conditions for transferred staff and the terms and conditions for employees recruited to work on the contract after the transfer. 12. Such requests for information will be restricted to that required for the purpose of monitoring compliance, will be designed to place the minimum burden on the service provider commensurate with this, and will respect commercial confidentiality. The service provider and the local authority will also support a central Government-sponsored review and monitoring programme on the impact of the Code, drawn up in consultation with representatives of local government, contractors, trade unions and the Audit Commission as described in paragraph 17, and will provide information as requested for this purpose. Such requests will follow the same principles of proportionality and confidentiality. Enforcement 13. The local authority will enforce the obligations on the service provider created under this Code. Employees and recognised trade unions should in the first instance seek to resolve any complaints they have about how the obligations under this Code are being met, directly with the contractor. Where it appears to the local authority that the service provider is not meeting its obligations, or where an employee of the contractor or a recognised trade union writes to the authority to say that it has been unable to resolve a complaint directly with the contractor, the local authority via the Authorised Officer as nominated in the contract will first seek an explanation from the service provider. If the contractor’s response satisfies the local authority that the Code is being followed, the local authority will inform any complainant of this. If the response does not satisfy the local authority, it will ask the service provider to take immediate action to remedy this. If, following such a request, the service provider still appears to the local authority not to be complying with the Code, the local authority will seek to enforce the terms of the contract, which will incorporate this Code. In addition, where a service provider has not complied with this Code, the local authority will not be bound to consider that provider for future work. 14. The contract shall include a provision for resolving disputes about the application of this Code in a fast, efficient and cost-effective way as an alternative to litigation, and which is designed to achieve a resolution to which all the parties are committed. The contractor, local authority and recognised trade unions or other staff representatives, shall all have access to this ‘alternative dispute resolution’ (ADR) process. The Government has asked local authorities, trade unions and contractors to come forward with an ADR mechanism, which is consistent with this Code, for inclusion in contracts. In the event that within a specified timescale the parties are unable to agree, the government will publish as an annex to this Code its proposed ADR mechanism. 23 15. Local authorities will have a duty in their performance plans to certify that individual contracts comply with best value requirements, including workforce requirements in this Code and the accompanying statutory guidance. The Audit Commission's appointed auditor will through the audit of the Performance Plan: Provide assurance that councils are meeting their statutory duty of certifying their compliance with the Code and that they have put in place adequate arrangements to ensure compliance; Receive information from third parties about any concerns with the council's compliance; Consider the information received and decide how to deal with those concerns; Where the subject of any concern is of material significance (e.g. large contracts or a major breach of this Code is alleged) the auditor will decide on a proportionate response to investigate the concerns. 16. If as a result of investigations the auditor has concerns about an authority’s compliance with this Code, they may exercise their appropriate statutory powers, which include: Requiring the authority to respond publicly to a written recommendation; Recommending that the Secretary of State should give a direction under Section 15 of the Local Government Act 1999. The Audit Commission will issue guidance to councils and auditors on how these matters will be dealt with. Sub-contractors 17. This Code sets out procedures for handling matters between the local authority and a primary contractor. Where the primary contractor to provide services to the local authority transfers staff originally in the employ of the local authority to a sub-contractor in consequence of the terms of the primary contractor’s obligations to the local authority, the primary contractor will be responsible for the observance of this Code by the sub-contractor. Review of this Code 18. The Government will monitor the operation of this Code and consult with representatives of local government, trade unions, contractors and the Audit Commission to assist in this process. 24 APPENDIX 4 Provision of Information by Luton Borough Council to Bidders The detailed approach taken on workforce matters may vary from contract to contract depending on the service to be delivered, including the size, type and duration of the contract and the nature of the intended contractual relationship. It will be made clear to potential service providers at the outset what categories of information and general standards will be sought. Accurate and timely information will be made available to bidders to enable them to take account of their prospective TUPE liabilities when preparing their tender. 1 Workforce Information to be provided during the Bidding Process 1.1 The following information must be provided where council staff is subject to TUPE. Where a tender will result in staff being transferred (under TUPE) from one external employer to another, the Council must make best endeavours to obtain this information from the incumbent contractor and provide it in the invitation to tender: 1.2 The potential number of staff who may be transferred (but with no obligation to identify individuals by name) The age, salary, length of service, hours of work, holiday entitlement, overtime hours and enhancement rates and any other factors affecting their redundancy entitlement and any outstanding claims arising from employment. The number of employees who are (and the number who are entitled to be) members of the LGPS The general terms and conditions applicable to those employees, including probationary periods, retirement age, periods of notice, current pay agreements, working hours, annual leave, special and discretionary leave, sick leave, maternity and parental leave, relocation schemes, car leasing schemes, occupational welfare, facility time arrangements and any other additional employment benefits whether or not stated to be a contractual entitlement. Relevant collective agreements and personnel policies Details of the Local Government Pension Scheme Details of any future promises or pay awards not yet implemented. Details of any individuals carrying out work for the organisation who are treated as casuals or freelance contractors (but with no obligation to identify individuals by name). As a matter of good practice, it is recommended that the letting authority should also consider providing the following information: Appropriate extracts from the DETR circular 10/99 Cabinet Office Statement of Practice on Staff Transfers A Guide to the LGPS (member’s booklet) 25 2 A pro-forma list of the employer discretions under the LGPS regulations and the current policies under the Local Government (Early Termination of Employment)(Discretionary Compensation) (England and Wales) Regulations 2000 [SI 2000/1410] A draft admission agreement The actuarial note on admission agreements A document akin to the “Actuary’s letter” Guidance Note of January 2000 from the Local Government Pensions Division of the DETR Guidance on the Franklin and others v PPS Public Services Ltd case A copy of the Government Code of practice on workforce matters in local authority service contracts Workforce Information to be provided at the Award of the Contract The following information must be provided (either by the Council or the current contractor) at the award of the contract to the successful bidder for each employee to be transferred: - 2.1 Personal details 2.2 Name (surname, forename, title and initials) Date of Birth Home address Job Title Work Location National Insurance Number Hours of work Pay Annual salary and grading structure Shifts, unsociable hours or other premium rates of pay Overtime history for the preceding 12 month period Allowances and bonuses for the preceding 12 month period Bank/building society account details for payroll purposes Outstanding loan/advances on salary or debts NI contribution rate Cumulative pay for tax and pension purposes Any other voluntary deductions from pay Cumulative tax paid 26 APPENDIX 5 Provision of Information from Bidders on their Intentions for the Workforce Luton Borough Council will have provided information (as set out in APPENDIX 3) on the terms and conditions and collective agreements applicable to the transferring employees. Bidders will need to provide detailed information about their intentions for the transferring workforce, demonstrate that they understand the terms and conditions applicable to these employees and explain how their technical proposals may affect the workforce. The bidders should also highlight any proposals they consider need to be negotiated with the trade unions or employee representatives and detailed information on any possible redundancies to be made on economic, technical or organisational reasons. The bidders will also be asked either at the expressions of interest stage, or at the tendering stage to provide positive statements of intentions to abide by the Government Code, and a general statement on their obligations under TUPE concerning the effect of a transfer on contracts of employment. This information will be used during the evaluation process. 1 Information on Key Terms and Conditions of Employment 1.1 The main terms and conditions of service on which tenderers will be required to provide factual statements are as follows: Pay and allowances Hours of work including any flexible working hours arrangements. Leave Sick pay Maternity leave Notice periods Probation –confirmation that those staff under probation on day of transfer period of probation will be unaffected. TU recognition Details of existing collective agreements made with the trade unions including collective agreements presumed to be unenforceable in specified circumstances. (Reg. 6 TUPE 1981) 2 Information on Other Terms and Conditions and Workforce Matters 2.1 Bidders should provide information relating to the headings listed below: - 2.2.1 Pensions Where the bidder proposes to offer a pension scheme with broadly comparable benefits to the Local Government Pension Scheme (LGPS) an appropriate certificate of broad comparability will be required. These may be 27 obtained from the Government’s Actuary’s department or the Pension Fund’s Actuary. The bidder should indicate whether a certificate has been obtained or, if not, whether the bidder intends to obtain a certificate. Information regarding the bidders’ intentions to seek Admitted Body Status to the LGPS is also required. An Admission Agreement with an external provider must be completed well before the LGPS members are transferred to the external provider to ensure there is no break in the continuity of membership for the staff. Until the Council has received a copy of this agreement any contract with the provider must be regarded as merely provisional. Council officers have a duty to ensure that this process is followed in full. An external provider seeking Admitted Body Status will be required to provide an indemnity or bond in respect of the agreement in an approved form and with an authorised insurer or a relevant institution. 2.2.2 Medical Retirement Proposals for medical retirement pensions and death in service benefits comparable to those available under the LGPS. This will be subject to evaluation as part of the pensions package. 2.2.3 Redundancy Proposals for redundancy selection criteria and redundancy compensation. In particular the Council would be interested to know the bidders’ views on calculating redundancy payments on an actual week’s pay rather than the statutory week’s pay limit of £250 per week (current figure at June 2000) 2.2.4 Illness/Injury at Work Details of employer’s liability insurers and insurance Details of claims procedures, compensation package Compensation Arrangements 2.2.5 Discipline/Capability/Management of Sickness Absence and Grievance Details of procedures 2.2.6 Performance and Appraisal Process of conducting staff performance appraisals Intentions or status with regard to Investors in People 2.2.7 Occupational Health and Welfare Details of arrangements 28 2.2.8 Equal Opportunities Information on relevant employment policies and practices 2.2.9 Training and Development Proposals for supporting the attainment of relevant professional qualifications by employees and continuous professional development. Training plan for service delivery within the specified contract area. Investors in People status and intentions Policy on equalities in training and development 3 Impact on the Workforce of Bidders’ Technical Proposals 3.1 The impact of the proposals should be explained under the following headings: Management and supervisory structures Changes to working practices Technical considerations (i.e. new equipment) Relocation of functions Proposals for recruitment or redundancy within the contract area Proposals to change (if legally possible) by negotiation existing terms and conditions of service or collective agreements How training needs will be identified and met How health and safety and equal opportunities issues will be identified and addressed. 29 APPENDIX 6 Bidders’ Past Performance on Workforce Matters It is important to focus on positive aspects of bidders’ track records, as well as possible weaknesses. Accreditation under Investors in People provides a useful indication of competence in personnel management and commitment to developing staff through training. Bidders may also wish to provide statements from their recognised trade unions. It is recognised that small businesses and new entrants to the market may not have the capacity or experience to respond to detailed enquiries but may nevertheless be able to make attractive bids. Information will be sought under the following headings: 1 Court or Tribunal Proceedings Details of any court or tribunal proceedings in respect of employment matters (not limited to those arising from TUPE or the Government Code) that the bidder has been involved in over the last 3 years (including any currently in action). 2 Number of cases/proceedings received Cause of action Number of employees covered by the proceedings Outcome of the proceedings (i.e. settled before hearing, tribunal decisions) TUPE Transfers (to be sought when more than five staff are likely to be transferred) Details of transfers of staff to the bidder under TUPE during the last three years: Numbers of staff transferred Date of transfer From whom staff were transferred Reason for transfer Numbers made redundant of those transferred for economic, technical or organisational (ETO) reasons. 30 APPENDIX 7 1 Post Transfer Reporting on Workforce Matters Reporting Successful contractors are to provide designated officers, as part of the normal reporting regime of the contract with the following information, on a regular basis depending on the more general monitoring arrangements for the contract. The first two points must be reported to the Council contract manager as soon as either side initiates court or tribunal action: 2 Any court action or tribunal proceeding relating to TUPE compliance or equalities legislation Any sex, race or disability discrimination or unfair dismissal proceedings Employment terms and conditions for new joiners working alongside transferred staff Proposed, agreed or imposed changes to terms and conditions of service in respect of employees transferred to the contractor under TUPE Disputes relating to TUPE compliance or equalities legislation which are regarded as unresolved by a recognised trade union Completed court action or tribunal proceedings relating to TUPE compliance or equalities legislation Out of court settlements relating to TUPE compliance or equalities legislation. Details of industrial disputes Turnover rates Management information on training and development Sickness Absence Statistics (including separate identification of absence related to industrial injury) Management information on health and safety matters i.e. accidents at work Admission Agreement Where the contractor obtains an Admission Agreement it will be necessary to periodically review that the sum of the bond or indemnity still covers the level of risk exposure which would arise on premature termination of the contract, The Administering Authority and the Council should agree with the contractor how periodic reviews will be undertaken to ensure that all the contractor’s employees who are members of the LGPS are employed in connection with the delivery of the outsourced function. (The Regulations allow the parties to the Agreement to agree what constitutes “employed in connection with”.) 31 3 Corporate Health Performance Indicators The contractor will be required to provide the following information, for the workforce engaged to deliver the outsourced function, on an annual basis from the start of the contract: 4 The percentage of senior management posts filled by women The number of working days/shifts lost to sickness absence Voluntary leavers as a percentage of staff in post Early retirements (excluding ill-health retirements) as a percentage of the total workforce Ill-health retirements as a percentage of the total workforce The number of staff declaring that they meet the Disability Discrimination Act disability definition The number of minority of ethnic community staff employed. Best Value Reviews The contractor will be required to participate fully in Best Value reviews of the service. 32 APPENDIX 8 Useful Information Council Contacts Workforce Issues Human Resources Contact Hilary Beaumont Equalities issues Equalities Implementation Officers Contact Val Grant Service and Supply contract issues Procurement Team Contact Chris Addey Health and Safety issues Health and Safety Team Contact Caron Rees Stakeholder Involvement issues Consultation Contact Nicola Reeve Legal issues Legal Services Contact Mary Cormack Pension information Payroll and Pensions Contact Angela Claridge Useful Websites and links www.cre.org - Commission for Racial Equality www.info4local.gov.uk - gateway for local authorities to get access to localgovernment-related information that is published on the websites of central government departments and agencies www.cips.org - Chartered Institute of Purchasing and Supply www.ogc.gov.uk -The Office of Government Commerce www.gendertrust.org.uk - Gender Trust website. Offers information and support transsexuals, as well as management guidelines for the employment of transsexuals. www.lg-employers.gov.uk/equal-pol-gen.html - Employers' Organisation for Local Government website. A summary of the Equality Standard for local government is available on this site. The standard was developed jointly with the Equal Opportunities Commission, the Commission for Racial Equality and the Disability Rights Commission. www.equalitydirect.org.uk - Equality Direct website offering advice on a wide range 33 of equality issues. www.opportunitynow.or.uk - Opportunity Now. A Business in the Community programme Working with employers to realise the full potential of women in the workforce www.womenandequalityunit.gov.uk - Women and Equality Unit website. This is part of the Cabinet office www.fawcettsociety.org.uk - Fawcett Society website. This is a national voluntary organisation working to create greater equality for women. www.rnib.org.uk - Royal National Institute for the Blind www.rnid.org.uk, - Royal National Institute for Deaf People 34 APPENDIX 9 - Contract officer checklist Who are your stakeholders? (end users, clients, professionals, families of clients, others affected (e.g. householders along a street), taxpayers, neighbourhood groups, local councillors, the whole community of citizens, etc?) Has a Best Value review been carried and what was the outcome? Were all relevant stakeholders consulted? Who are your key beneficiaries (which stakeholders will benefit from the contract)? In the views of the city, central government and the public, are your key beneficiaries vulnerable people? If so check their needs are put first; consult all stakeholders about workforce matters and equalities, but ensure vulnerable beneficiaries/end-users do not lose out to more vocal (but less affected) groups. If not, consider with the beneficiaries/end users first, and other stakeholders second, their preferred trade-off between workforce matters and equalities issues and functionality. Consider with stakeholders workforce matters and equalities issues in all their forms. Be clear which approaches to workforce matters and equalities are valued by stakeholders above others. Contact HR about possible TUPE implications and workforce matters Who (if any one) will lose out through the contract? What impact does this have on workforce matters and equalities? Does the specification accurately reflect the stakeholder view of the appropriate trade off between workforce matters and equalities issues and functionality? Do the evaluation criteria accurately reflect the stakeholder view of the 35 appropriate trade off between workforce matters and equalities issues and functionality? Is the specification written so that it can be monitored? Who will monitor it? How much will that cost? How many companies can meet your specification? (be careful not to restrict your market too much) 36