Lawyers say pension rights may end in tiers as all parties seek government clarity on Tupe

Under proposals contained in the government's consultation paper on the rules governing staff transfers from one employer to another — Tupe — ministers have signalled their desire to create a legal right to transfer of pensions.

Currently, the government expects private contractors taking on public sector staff to offer pension provisions 'broadly comparable' to those they have enjoyed.

A legal right, said Norman Rose of the Business Services Association, would not therefore be a major break with existing practice.

No pensions guidelines, however, have to-date been applied to transfers of staff from one private sector concern to another. The issue has been regarded as too complex.

Christopher Mordue, a specialist in Tupe at employment law firm Pinsent Curtis Biddle said the move would 'create additional expenses which will be factored into contract costs.'

Meanwhile the huge differences in pensions provision from one firm to another in the private sector would open up the potential for disputes.

'When contractors put in tenders they would have to spell out their plans in terms of pensions...there will be scope for a lot of confusion,' Mordue told The Facilities Business.'

Indeed the government seems so unsure how to proceed that it outlines six alternative options in the consultation document and asks for interested parties to propose yet more — a factor that has frustrated contractors' representatives hoping for clarity.

'The private sector pension area is a minefield,' said the BSA's Rose. 'I do not believe you can offer pension rights which do not match what you had before the transfer without being in breach of the rules,' he added.

However Mordue believes the consultation document's proposals on the scope of Tupe legislation will help to clarify exactly when and where Tupe applies.

Both Mordue and Rose welcomed proposals obliging the transferor to give the transferee written notification of 'all the rights and obligations in relation to employees that are to be transferred'.