Saturday, February 19, 2005

Workers will have no choice but to transfer to company

MoD Privatisation

Ministry of Defence has told workers hit by its outsourcing plan that if they refuse to transfer to the private sector, they will be in breach of their MoD employment contract and will not be entitled to redundancy compensation. Information distributed to them by the MoD made clear that they would not have the right to claim constructive or unfair dismissal. In effect, they will have no choice but to move to the company that ultimately wins the privatisation contract.

But once transferred, the workers risk losing their MoD redundancy terms – which are regarded as more generous than the norm - should the company subsequently run into financial trouble or go into liquidation. These are some of the finer details of the MoD proposal announced this week.

“Staff automatically become employees of the contractor when their posts transfer,” the MoD information sheets stated. “If they refuse to transfer they will be in breach of contract. There is no obligation on the MoD to continue to employ you and legally you may be regarded as having terminated your employment. You would not be entitled to redundancy compensation and the question of constructive or unfair dismissal could not arise.”

And if the company goes into liquidation during the term of the contract, workers transferred from the MoD will have little protection as far as their redundancy terms are concerned.

"Redundancy compensation under these circumstances would essentially be a matter between the individuals concerned and the company liquidator,” the MoD information leaflet said. “Individuals would, as a minimum, be entitled to compensation under the government’s statutory redundancy scheme."

British military officials stated this week that the privatisation would “almost certainly” lead to a reduction in the size of the workforce transferred to the private company.

Under the terms of the outsourcing contract, and in line with employment law, the winning company would have to pay any redundant workers on the same terms as the MoD. The amount of compensation would be based on the total length of continuous service with the MoD and the new employer. As often happens in any redundancy situation, that places the youngest workers at most risk. Any company with economic sense will lay off those with the least service, because that would be the cheapest option.

“In any redundancy situation, it’s always cheaper to lay off the youngest because redundancy payments are partly based on years of service,” said an employment expert.

Reform Party criticise MoD cuts

The Reform Party has deplored the announcement of the MoD privatisation plans and what it described as “the drastic cuts and steady erosion of MoD workers employment conditions in recent years, leading to this most recent disaster.

A party spokesman said:

We have always opposed contractorisation of MoD work, a step which has the effect of undermining the workforce and depriving them of job security. We fully support the MoD workers’ struggle to ensure the stability and maintenance of their jobs and benefits without contractorisation. It is ironic that the MoD is talking of necessary cut backs in Gibraltar and the UK to save money at a time when the British Government have spent billions of taxpayers money on interventionist actions abroad which many regard as unnecessary.

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